May Housing Numbers: Mixed Signals

Zillow found that May saw a slew of mixed signals, from a decrease in housing starts to a rise in the number of building permits.

The research firm’s latest analysis found that May housing starts fell a seasonally-adjusted 0.9% from April and 4.7% from May 2018, to 1.27 million units. At the same time, the number of building permits rose 0.3% in May from April, to 1.29 million. That’s down 0.5% from a year ago.

A slew of mixed market signals is both buoying and biting builder confidence as the year progresses, resulting in a small monthly slide in new housing starts in May after a slight upward revision to April numbers. For buyers who can secure an adequate down payment and find a home in their price range, low mortgage rates mean a monthly payment remains quite affordable – and mortgage applications are up accordingly… Buildable land is at a premium, making it hard for builders to find areas where they can turn an acceptable profit in the still-strong housing market. We’re left with a new construction market taking two steps forward and one step back, and May was a one-step-back month.

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