Instant Reaction: May Housing Starts

The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s release from the U.S. Commerce Department on May new home construction:

“New home construction activity soared to its highest level in over a decade, which is fantastic news as more housing inventory will be available as the year proceeds. Moreover, construction and real estate industry jobs are being created and boosting the economy. GDP growth of 4 percent to 5 percent is possible in the second quarter, as a result. The Midwest region experienced the biggest gain and hence the region will remain more affordable. The more unaffordable West region will continue to experience an intense housing shortage, as both housing permits and housing starts fell in that region. For the country as a whole, an additional 20 percent to 25 percent gain in home construction is needed to make the market more balanced.”