Groundbreaking for single-family homes rose in May for the third consecutive month, pointing towards recovery in the residential real estate market amid economic slowdown, according to Bloomberg.
Builders have begun construction on 516,000 single-family homes last month, up 3.2 percent from the month prior. May’s figures were the most homes started this year.
Building permits issued also rose to the highest levels since September 2008, increasing 7.9 percent to a 780,000 annual rate, according to Bloomberg. This shows that low prices and mortgage rates are encouraging new projects.
“We saw a very strong number in new permits, indicating builders are seeing improving demand,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, told Bloomberg. The report “was a lot better than the headline number would suggest.”
Though single-family homes rose in May, construction of apartments hit a slump causing the total housing starts to take an unexpected drop.
Total housing starts fell 4.8 percent to 708,000 in May after a strong month prior when 744,000 units were added.