The numbers: Construction of new houses rose 4.3% in May as a reopening U.S. economy and ultra-low mortgage rates drew more buyers and encouraged builders to start to speed up work.
Housing starts climbed to an annual rate of 974,000 last month from a five-year low of 934,000 in April, the Commerce Department said Wednesday. It was the first increase since January.
Economists polled by MarketWatch has forecast starts to rise to a 1.13 million rate. That’s how many new homes would be built in a year if the level of construction was the same each month.
Although the increase was less than expected, a sharp rise in builder permits indicates construction is on track to expand more rapidly soon. Permits to build new houses jumped 14.4 % to a 1.22 million annual pace.
What’s lighting a fire under builders is a surge in applications to buy a new home.