Housing Starts Indicating a Slowing Trend

For the third consecutive straight month with the May report it shows signs a future shortage of houses. A recent report from the Commerce Department indicated housing starts which had a 2.7 monthly decline in April and a 7.7 drop in March show a 5.5% drop in May. Although home construction is up 3.2% year to date. News reports indicate optimism in sales from home builders, yet the overall number of homes for sale has shown a steady decline over the last two years. Another major real estate indicator is building permits. That number has drop precipitously 5% to just over 1 million nationwide. We don’t have the local numbers in Los Angeles County, but found that the Wells Fargo builder sentiment index is 67. This is a positive number as any reading above 50 is a positive number and that number has been well above 50 for the last nine months.