May housing starts fell 10 percent from April, but were still up 7.8 percent from the May 2009 rate, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
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Housing starts were at a seasonally adjusted annual rate of 593,000 in May. Single-family starts were at a rate of 468,000, 17.2 percent below April. The May rate for units in buildings with five units or more was 112,000.
According to the National Association of Home Builders, the slowdown in May was expected due to the expiration of tax credits meant to stimulate the housing market.
"Today’s numbers show an anticipated pull-back on single-family building following the tax credit deadline,” said NAHB Chief Economist David Crowe. “No doubt, a certain amount of building and buying activity that would have taken place in May was pulled forward to accommodate the program’s end date, which is why we have projected some softening of the numbers in the second quarter."
Crowe says that in the coming months, an "improving economy, rising employment, low mortgate rates and stabilizing home values" should boost the housing market, though financing for new projects and "accurate appraisals of new homes" will slow the recovery.
Year-to-date housing starts showed more positive signs, with an increase of 19.9 percent. By region:
- Northeast: Up 29.7 percent
- Midwest: Up 18.5 percent
- South: Up 22.5 percent
- West: Up 10.1 percent
Single-family authorizations in May were at a rate of 438,000, 9.9 percent below April.
Privately-owned housing completions in May were at a seasonally adjusted annual rate of 687,000, 7.4 percent below April and 15.4 percent below May 2009. Single-family housing completions were at a rate of 507,000, 7.8 percent below April.
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