Housing Economy Strengthens From Rising Sales and Permits

The NAHB’s forecast predicted the housing industry to lead in the economy’s upturn after the pandemic. This has wrung true as data from home building has shown a rise.

According to the National Association of Home Builders, single-family permits rose 12% in May. The U.S. Housing and Urban Development and Commerce Department reported that the total housing starts rose 4.3% to a seasonally adjusted annual rate of 974,000 units. This accounts for “the number of housing units builders would begin if they kept this pace for the next 12 months.”

“The May housing report is consistent with the positive results of the NAHB/Wells Fargo builder sentiment index, and we expect this momentum to continue as economic activity recovers,” said NAHB Chief Economist Robert Dietz. “In another promising sign, single-family permits are up almost 2 percent on a year-to-date basis and builders are bringing back thousands of workers laid off in March and April to meet renewed demand.”

Home sales are also on the rise, in fact, new single-family home contracts rose 13% year-over-year gain in May. The data also indicates “support growth for new home building” as inventory dropped to a sales-adjusted level of a 5.6 month supply (levels below a 6-month supply equals growth for new home building).

A rise in permits and sales along with an increase in builder confidence are good signs for a strengthening in this weathered economy.

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