Housing Starts Soften As Expected in May

Nationwide housing starts and building permits stalled in May following the expiration of the federal home buyer tax credit program, according to the U.S. Commerce Department. New-home production declined 10 percent to a seasonally adjusted annual rate of 593,000 units, the slowest pace since December 2009, while permit issuance slowed 5.9 percent to a rate of 574,000 units, its slowest pace since May 2009.

The decline in housing starts in May was entirely on the single-family side, where the government’s tax credits for first-time and repeat buyers had the greatest impact in the previous months. In that segment, starts fell 17.2 percent to a seasonally adjusted annual rate of 468,000 units, their slowest pace since May of 2009.