Housing Starts Fall 0.4% in May

Home construction in the United States edged down in May, but still remained at healthy levels, the Commerce Department reported Tuesday.

Housing starts fell by 0.4% percent to a seasonally adjusted annual rate of 1.62 million, following a solid 2.3% increase in April. Analysts had been predicting a 1.2% decline, according to the Associated Press.

Housing construction requires flatbed carriers to haul construction material and affects demand for dry van freight like household appliances and furniture.

Also, a sustained reduction in sales of new homes likely means that fewer homes will be built in coming months. A contraction in housing construction means a decline in freight traffic for trucking companies of both raw materials to build them and finished goods to fill them.

However, Bloomberg noted that housing construction may stay robust because the average pace of new home sales in the first four months of the year was faster than the record sold in 1998.

In addition, building permits, an indictor of future construction, rose 2.1% to 1.621 million units.

y region, total housing starts fell by 28.3% in the Northeast to a seasonally adjusted annual rate of 132,000. In the Midwest, starts rose by 15.8% to a rate of 344,000. In the South, they fell by 1.9%, while in the West, they rose 2.9%.

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