May 2011 U.S. Construction

Click image for larger view

Click image for larger view

Overall construction spending in the United States decreased by 0.6 percent during May, to a seasonally adjusted and annualized rate (SAAR) of $753.5 billion. Private non-residential construction was the only category to post an increase, gaining 1.2 percent; by contrast, private residential construction fell 2.1 percent.
 

Click image for larger view

Although the value of residential construction put in place fell, total housing starts rose by 3.5 percent -- to 560,000 units (SAAR). Total starts remained 75 percent below the January 2006 peak of nearly 2.3 million units.
 

Click image for larger view

Click image for larger view

Most of the rise in starts occurred in the single-family component (15,000 units); multi-family starts rose by 4,000 units.
 

Click image for larger view

New-home sales retreated in May, falling by 2.1 percent to 319,000 (SAAR). The median price of new homes sold rose 2.6 percent to $222,600.
 

Click image for larger view

Despite the slowdown in sales and a jump in completions, the inventory of new single-family homes shrank in both months-of-inventory and absolute terms. Inventory stood at 166,000 units and 6.2 months (down from 6.3 months). Once again, the number of homes for sale was the lowest since such records began in January 1963.
 

Click image for larger view

Existing home sales fared worse than their new-home counterparts in May, falling by 190,000 units (SAAR), or -3.8 percent. The share of total sales comprised of new homes ticked up to 6.2 percent.
 

Click image for larger view

With the median existing home price rising by $5,400 (3.4 percent), to $166,500 in May, housing affordability retreated noticeably once again. For the first time in about a year, home price data from S&P/Case-Shiller also rose.

“In a welcome shift from recent months, this month is better than last -- April’s numbers beat March,” said David Blitzer, Chairman of the Index Committee at S&P Indices in reference to the S&P/Case-Shiller home price indices. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather.
 

Click image for larger view

“Other housing statistics show the same trends,” Blitzer continued. “Single-family housing starts were up in May, but still well below their 2010 levels and still very close to their 30-year low…. While foreclosures remain a large factor in most parts of the country, the S&P/Experian Consumer Credit Default indices show a small decline in the pace of new defaults since last November. Other reports confirm that banks have tightened lending standards in the past year making it harder to qualify for a mortgage despite very low interest rates.

“In the monthly details, we saw home prices increase in April over March. The 10-City was up 0.8 percent and the 20-City rose 0.7 percent [on a seasonally unadjusted basis]. Only seven cities experienced lower prices compared to 18 in March. However, the seasonally adjusted figures saw less dramatic improvement. The annual rate of change for the 10-City remained the same at -3.1 percent; whereas the 20-City fell further from -3.8 percent reported for March to -4.0 percent for April. For a real recovery we would need to see several months of increasing home prices, large enough to shift the annual momentum to the positive side. In short, better news, but still a lot of questions and a long way to go.”
 

Click image for larger view