US housing starts up despite low sentiment among homebuilders

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Housing starts in the United States were up more than had been expected in May. Overall, new starts were up 5 percent to an annual figure of 1.96 million starts. Analysts had expected that the annualized rate would be 1.85 million. The May figure also was above a revised annualized rate in April of 1.86 million starts. The May figures, however, were 3.8 percent lower than the figure of 2.03 million in May of last year. Single family starts in May were at a rate of 1.59 million, above Aprils 1.56 million. Multi-family starts (those with five or more units) were up 25.4 percent.The new data comes on the heels of a report released Monday by the National Association of Home Builders which showed that sentiment among homebuilders is currently at its lowest ebb in over 11 years. This is indicated by the fact that permits to begin construction were down 2.1 percent in May, compared to April, to 1.93 million. This was the lowest number of permits since November 2003. For the year, permits are down by 8.5 percent.Analysts expect that, despite this months increase, housing starts will decline in the next few months due to high inventories of unsold new homes and declining prices.