U.S. homebuilding rebounded in May, supported by an acute shortage of previously owned homes available for sale, but construction continues to be hampered by very expensive lumber and shortages of other building materials.
Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.572 million units last month, the Commerce Department said on Wednesday. Data for April was revised down to a rate of 1.517 million units from the previously reported 1.569 million units.
Economists polled by Reuters had forecast starts increasing to a rate of 1.630 million units. Last month's increase left starts lower than March's rate of 1.733 million units, which was the highest level since June 2006.
Though lumber prices dropped from a record high set in early May, softwood lumber prices increased 154.3% year-on-year in May, according to the latest producer pricer data.
A survey from the National Association of Home Builders on Tuesday showed confidence among single-family homebuilders fell to a 10-month low in June. The NAHB blamed the ebb in sentiment on "higher costs and declining availability for softwood lumber and other building materials," noting that was driving up prices of new houses "which has slowed the strong pace of home building."
Permits for future homebuilding fell 3.0% to a rate of 1.681 million units in May. Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom. But supply is tight, with the inventory of previously owned homes near record lows.
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