U.S. homebuilding rose less than expected in May, but a strong rebound in permits for future home construction suggested the housing market was starting to emerge from the COVID-19 crisis.
Fred Katayama reports.
U.S. housing starts climb in May
Homebuilders got busier in May as the U.S. economy began to reopen.
Housing starts rebounded 4.3%, a turnaround from the huge double-digit percentage declines in April and March.
But it was far shy of what economists were expecting, and it was down more than 23% on a year-on-year basis.
Single-family homebuilding, which accounts for the largest share of the housing market, was flat.
But those numbers could improve.
Permits for future home construction bounced back 14.4% in May.
That lends support to economists' expectations that the housing market will lead the economy out of a recession.
What's more, there's pent-up demand.
The Mortgage Bankers Association reported Wednesday that applications for home loans rose 4% last week to their highest level in roughly 11 years.
Spurring that surge was a drop in mortgage rates to a record low.
But with nearly 20 million people unemployed in the U.S., a full housing recovery might still be a long wait.