U.S. housing starts are likely to have risen slightly in May

U.S. housing starts are expected to have increased slightly in May. In the prior month, housing starts fell 3.7 percent as multifamily building halted. Multifamily accounted for all of the fall, as single-family starts rose higher. Single-family starts through the first four months of the year are running 8.3 percent ahead of last year, which indicates that the housing market is on strong footing in spite of month-on-month swings.

Some of the recent volatility could be traced to extreme weather in the Midwest and Northeast, as well as the topping out of apartment construction, as deliveries in several markets have pushed up vacancy rates, stated Wells Fargo in a research report.

Demand for single-family housing continues to rise, with the solid labor market boosting income gains. Supply of existing homes is restricted, making new single-family building more crucial. Continued positivity among the country’s homebuilders implies a solid spring home selling season in spite of disappointing headline readings in recent months. According to Wells Fargo, housing starts are expected to have risen 1.30 million in May.

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