U.S. home construction rebounded 4.3 percent in May after steep declines caused by shutdowns.
The Commerce Department reported Wednesday that new homes were started at a seasonally adjusted annual rate of 974,000 last month after steep declines in April and March.
Construction activity remains 23.2 percent below last year’s pace.
Home builders are hoping that as the nation re-opens, housing will post a strong recovery, helped by super-low mortgage rates.
Hot spots are popping up in regions of the country where building activity is increasing, but not in the South, where housing starts slid.
Applications for building permits, a good indication of future activity, rose a sizable 14.4 percent in May to an annual rate of 1.22 million units.
The report showed that construction of new single-family homes was up 5.4 percent while construction of apartments with five units or more increased 16.9 percent.
Construction was up a huge 69.8 percent in the West and 12.8 percent in the Northeast, but housing starts fell 16 percent in the South and were down 1.5 percent in the Midwest.
A National Association of Home Builders/Wells Fargo survey of builder confidence released Tuesday showed a record jump of 21 points in June to a reading of 58. Any reading above 50 indicates a positive market.
“We look for strong demand, improving homebuilder confidence and an ongoing shortage of supply to support growth in housing starts over the rest of the year, but we still expect starts to be down on average across 2020 overall,” according to Nancy Vanden Houten, lead U.S. financial economist at Oxford Economics.
The report comes in the wake of a record-breaking employment report which revealed that 2.5 million jobs had been added in May.
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