May housing starts decline
Home
construction and permits dropped last month after a home buyer tax credit
program was allowed to lapse, the Commerce Department reported.
Home construction and permits dropped last month after a home buyer tax credit program was allowed to lapse, the Commerce Department reported.
New single-family home building dropped 10 percent to a seasonally adjusted annual rate of 593,000 units - the slowest pace since December 2009. New permits declined 5.9 percent to a rate of 574,000 units, its slowest pace since May 2009, the department said.
"Not surprisingly, builders tapped the breaks on new-home production and pulled fewer permits for new homes in May in response to an expected lull in buyer demand following expiration of the tax credits at the end of April," said Bob Jones, chairman of the National Association of Home Builders and a home builder from Bloomfield Hills, Mich.
NAHB chief economist David Crowe said the drop was expected.
"Today's numbers show an anticipated pull-back on single-family building following the tax credit deadline," Crowe said. "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. That said, in the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should play their part to keep the housing market moving forward."
Home construction and permits dropped last month after a home buyer tax credit program was allowed to lapse, the Commerce Department reported.
New single-family home building dropped 10 percent to a seasonally adjusted annual rate of 593,000 units - the slowest pace since December 2009. New permits declined 5.9 percent to a rate of 574,000 units, its slowest pace since May 2009, the department said.
"Not surprisingly, builders tapped the breaks on new-home production and pulled fewer permits for new homes in May in response to an expected lull in buyer demand following expiration of the tax credits at the end of April," said Bob Jones, chairman of the National Association of Home Builders and a home builder from Bloomfield Hills, Mich.
NAHB chief economist David Crowe said the drop was expected.
"Today's numbers show an anticipated pull-back on single-family building following the tax credit deadline," Crowe said. "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. That said, in the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should play their part to keep the housing market moving forward."
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