Housing Starts Fall 32.1% in May

The dropoff marks the 13th straight month of declines.
Publish date:

Single-family housing starts fell for the 13th straight month in May, a sign that residential construction remains a significant drag on the U.S. economy.

Overall housing starts -- including multifamily units -- totaled a seasonally adjusted annualized rate of 975,000, which was down 3.3% from April and down 32.1% from a year ago, the Census Bureau said Tuesday.

New permits, an indicator of future demand, totaled an annualized rate of 969,000, which was down 36.3% from last year.

Both numbers were essentially in-line with economists' expectations.

Wachovia economic analyst Adam York says new construction activity will continue to decline into the summer, and he expects a weak to nonexistent recovery after that.

Cramer: Florida Raises Hope for U.S. Real Estate

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1614612129; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

The weakness in the housing starts remains a Catch-22 for homebuilders. "In some ways, you need the declines to help the supply-demand imbalance you have in the marketplace. But obviously the declines hurt builders and the economy that that supports," York says.

In premarket trading Tuesday,


(LEN) - Get Report


KB Home

(KBH) - Get Report


Pulte Homes

(PHM) - Get Report

and other homebuilders were trading flat.