Housing starts are up, and inventory is finally showing signs of stabilizing.
Two new reports have indicated that the low inventory that has dogged the housing market may be showing signs of improvement. Data released by the US Census Bureau and Department of Housing and Urban Development has indicated housing construction starts in May were up 6.8% over April and up 28% over May 2012 to 914,000 units.
Building permits for privately-owned housing units were up 3.1% in May and up 20% year-over-year to an annual rate of 974,000 units. Permits for single-family homes were up 1.4% to 622,000 units in May, the report showed. Housing completions were down month-over-month .9% in May to 690,000, but were up 12.6% from May 2012.
Meanwhile, the RE/MAX National Housing Report has indicated housing supply remained relatively stable in May. While supply from May 2012 to May 2013 was down 26.4%, the report showed supply edged down a modest 0.9% from April to May.
“Reduced inventory continues to be a concern, although for May and April month-to-month changes have shown signs of stabilization,” the report said. There was approximately 3.5 months in supply in May with an average 70 days on the market.
Cities with the lowest supply of inventory included San Francisco (1.0 months), Denver (1.4), Boston (1.5), Phoenix (1.7), San Diego (1.8), Washington DC (1.9), Orlando (1.9), and Seattle (2.0), the report showed.
A healthy housing market typically has six months of supply.