| Gold: The U.S. housing sector showed mix signs of growth last month, according to data from the Commerce Department. Tuesday, the department reported that housing starts fell 11.1% in May to a seasonally adjusted annual rate of 1.036 million units, down from April’s revised rate of 1.165 million, which was originally reported at 1.07 million units. Heading into the report, consensus estimates were calling for housing starts to rise to an annual rate of 1.10 million units. Although construction in the housing market was weaker month-over-month, the data shows that starts were 5.1% higher compared to last year. Also in other positive housing news, the department said the tally of building permits – an important indicator of future construction activity and less influenced by weather – increased by 11.8% in May to an annualized rate of 1.28 million permits, up from April’s revised rate of 1.14 million. Economists were expecting to see 1.11 million permits issued last month. Looking at the components of the report, the biggest decline in the housing sector was from single family homes, which dropped 5.4% to 680,000 units, down from April's revised 719,000. Apartment unit starts, which consist of more than five units, came in at 349,000. The annual rate of building permits for single family homes rose last month by 2.6%, to 683,000, up from April's revised rate of 666,000. Building permits for apartment building with more than five units came in at 557,000. Although housing starts was disappointing, Andrew Grantham, senior economist at CIBC World Markets, dismissed the numbers, saying the stronger building permit data shows a much healthier sector. "The permit data suggests that the uptrend in starts will accelerate in the coming months," he said. "The trend in permit applications ties in better with the uptick in household formation we have seen recently, and suggests that homebuilding will accelerate again and be a significant contributor to growth not just in Q2 but also the quarters ahead." |
