Home building south of the border surged to near an 11-year high in May as both single-family and multi-family home construction gathered steam, but a second straight monthly drop in permits suggested housing market activity will remain moderate.
Figures released Tuesday by the U.S. Commerce Department housing starts jumped 5% to a seasonally-adjusted annual rate of 1.350 million units last month. That was the highest level since July 2007. Data for April was revised slightly to show starts falling to a rate of 1.286 million units instead of the previously reported pace of 1.287 million units.
Building permits fell 4.6% to a rate of 1.301 million units, the lowest level since September 2017. Economists polled by Reuters had forecast housing starts rising to a pace of 1.310 million units last month and permits declining to a rate of 1.350 million units.
Single-family home building, which accounts for the largest share of the housing market, increased 3.9% to a rate of 936,000 units last month.
The Commerce Department reports also said permits to build single-family homes fell 2.2% in May to a pace of 844,000 units, also the lowest level since September 2017. With permits lagging starts, single-family home building could slow in the months ahead.
A survey on Monday showed confidence among single-family home builders dipped in June, with builders "increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability." According to the survey, the expensive lumber had "added nearly $9,000 to the price of a new single-family home since January 2017."
