By Patrick O'Keefe, Director of Economic Research, J.H. Cohn
 
Homebuilding activity picked up in May, as builders nationally started construction on 17.2% more units than in April. It appears that the bottom is in for builders.
 
Nonetheless, homebuilding remains at historically low levels. In 50 years of recordkeeping, May ranks fourth from the bottom; those months that fall below it all occurred this year.
 
In part, May’s gain reflected the third consecutive increase in single family construction, which rose 7.5% in May. Single family starts are 12.3% higher than February’s bottom.
 
But most of the month’s rise (53.8%) was due to a surge in multifamily construction (up 77.1% in May), which was concentrated in the west and south. Unlike single family starts, multifamily housing activity had dropped in the previous two months.
 
Builders’ plans for future construction rose by 4% in May, but builders remain cautious about future market conditions. Compared to the first five months of 2008, planned housing construction is down 47.8%.
 
 
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