Housing Shows Strength as Sales and Permits Rise

Disaster Response
Published

The following excerpts were recently published in NAHB’s bi-weekly e-newsletter Eye On the Economy by Chief Economist Robert Dietz:

Consistent with NAHB’s forecast, home building data are showing signs of leading an emerging economic rebound. While risks to the outlook remain, particularly in the form of local, rising virus spread and ongoing layoffs, the recession appears to have taken a short and sharp downturn...

...[In] May, single-family starts held at a flat annual rate of 675,000; however, single-family permits expanded by 12%. Multifamily permits for properties of five units or more are down more than 10% thus far in 2020, as concerns within the rental market continue due to elevated unemployment levels.

For home sales, new single-family home contracts jumped in May (676,000), posting a 13% year-over-year gain after a significant downward revision for the April estimate (revised to 580,000, marking a 25% decline from the pre-recession peak in January). Inventory fell to a sales-adjusted level of a 5.6-month supply. Levels below a 6-month supply generally support growth for new home building.

The increase in builder confidence, permits and sales all suggest construction gains are on the horizon. However, a medium-term concern for the housing market is whether the current strength in demand is an unlocking of deferred demand from early spring, or reflects the emerging trend for home buying as a growing number of prospective buyers are looking in small metro and exurban locations.

To subscribe to the Eye on the Economy e-newsletter, email [email protected].

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

House Prices

Jun 13, 2025

Which Markets Have Seen the Greatest House Price Appreciation Since the Pandemic?

House price growth slowed in the first quarter of 2025, partly due to a decline in demand and an increase in supply. But since the onset of the COVID-19 pandemic, house prices have surged nationally. See which markets saw the greatest - and the least - house price appreciation since the pandemic.

Professional Women in Building Council | Workforce Development

Jun 12, 2025

How PWB Members are Bridging the Skilled Labor Gap in Construction

NAHB's Professional Women in Building (PWB) Council has announced a new workforce development partnership with SkillsUSA, a national education nonprofit.

View all

Latest Economic News

Economics

Jun 13, 2025

Household Real Estate Asset Value Falls to Start the Year

The market value of household real estate assets fell from $48.1 trillion to $47.9 trillion in the first quarter of 2025, according to the most recent release of U.S. Federal Reserve Z.1 Financial Accounts. The value of household real estate assets declined for three consecutive quarters after peaking at $48.8 trillion in the second quarter of 2024 but remains 2.1% higher over the year.

Economics

Jun 12, 2025

Producer Prices Rise in May: New Construction Input Analysis

Prices for inputs to new residential construction—excluding capital investment, labor, and imports—rose 0.2% in May, following a (revised) decrease of 0.2% in April. These figures are taken from the most recent Producer Price Index (PPI) report published by U.S. Bureau of Labor Statistics.

Economics

Jun 11, 2025

Inflation Up Slightly in May

Despite inflationary pressure from tariffs, inflation in May rose slightly but came in softer than expected. The Consumer Price Index increased from 2.3% in April to 2.4% in May year-over-year, according to the Bureau of Labor Statistics’ report.