U.S. homebuilding increased less than expected in May but experienced a strong rebound in permits for future home construction, which could signal the housing market is emerging from the COVID-19 crisis, according to www.cnbc.com.
U.S. new home construction rose 4.3% in May to a seasonally adjusted annual rate of 974,000 units; economists had expected an increase of 22.3%.
However, building permits rebounded 14.4% in May to a rate of 1.22 million units, which could signal the housing market will help lead the economy out of a recession.
Single-family starts grew 0.1% to 675,000 units, and multifamily starts increased 15% to a rate of 299,000 units.
However, with nearly 20 million unemployed and a resurgence of COVID-19 infections in some parts of the U.S., the housing market still could face challenges.
“Housing is a leading economic indicator, and it is pointing the way forward, but there is a limit to growth when the economy has to drag along the millions and millions of unemployed workers displaced in this pandemic recession who won’t be seeing paychecks anytime soon,” said Chris Rupkey, chief economist at MUFG in New York.
