Residential construction for May saw building permits drop -7.0% to 1.694 million nationally, while housing starts dropped by -14.4% to 1.549 million. Both numbers were significantly lower than market expectations for 1.785 million and 1.701 million, respectively.
Here in the Triangle market covering Raleigh and Durham, there are 644 new construction homes on the market. In addition, there are 260 new home communities in that same area. If you assume that each of those communities have 50 homesites in them, that is over 13,000 homes that could be built in the next 8-9 months.
Although national permits saw a large decline, they are still +.2% higher vs. May 2021. Single-family permits were at 1.048 million in May, which is -5.5% below last month.
To add a little more perspective, back in 2003-2005 in the United States, there were an average of 1.5 million new homes built during that three year period. The past two years are the first time the US has been above that
Regionally, all have declined with the largest drop in the Northeast at -20.2%, with all others dropping less than 10%. Looking at housing starts, we see a -3.5% year over year drop for May, and now posting their weakest levels since February 2021. Single-family starts dropped -9.2% from April and are also -5.3% weaker vs. the May 2021 level. The Northeast and Midwest had decent gains, +14.6% and +1.9%, while the South fell -20.7% and the West down -17.8%.