Housing starts surged in May from a year earlier, but slowed from the previous month, as economic conditions continued to give builders the confidence they need to break ground on new developments.
Real estate data shows that single-family housing starts rose 28.5 percent in May from the previous year, according to a report from the Department of Housing and Urban Development. As a result, there were an estimated 708,000 starts compared to 551,000 in May 2011.
Despite this significant increase, the housing starts rate was 4.8 percent lower from April, the report said.
Meanwhile, this increase in construction activity on an annual basis was not unexpected, as the National Association of Home Builders recently found that builder confidence increased to 30 out of 100 this month. This is the highest this number has been since 2007.
"This month's modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates," said NAHB chairman Barry Rutenberg.