The number of building permits decreased by 24.2 percent
In the struggling housing construction sector, no turnaround is in sight yet, quite the opposite: The number of building permits decreased by 24.2 percent or 5700 in May compared to the previous year, as the Federal Statistical Office announced on Thursday.
Compared to May 2022, there was even a decline of almost 44 percent. From January to May of this year, a total of 89,000 residential units were approved. This was 21.5 percent or 24,400 fewer than the previous year. Expensive materials and increased financing costs continue to deter many potential home builders and investors.
The decline in building permits for single-family homes in the first five months of the year was the most pronounced, with a decrease of 31.5 percent to 15,500. For two-family homes, a decrease of 15.7 percent to 5500 was reported. The number of approvals for multi-family homes, the numerically strongest building type, also decreased significantly: Here, it went down by 21.7 percent to 47,900.
I noticed the notable decrease of 24.2% in building permits during May, which is my concern as a potential home builder. The decline in permits for various types of buildings, including single-family, two-family, and multi-family homes, suggests a challenging period ahead for the housing construction sector in May, compared to the same period last year.
