U.S. housing starts decline to lowest level in more than a year
U.S. housing starts decline to lowest level in more than a year
Abstract
New U.S. home construction dropped in May, highlighting the impacts of ongoing supply chain challenges and sinking sales as mortgage rates rise. Residential starts declined 14.4% last month to a 1.55 million annualized rate, the lowest in more than a year, according to government data released Thursday. The monthly decline in starts was the largest since April 2020 and suggests residential construction is coming under pressure as higher mortgage rates take an even bigger toll on demand. The figures come after the Federal Reserve raised its benchmark rate by 75 basis points in a meeting Wednesday and held out the possibility of another such move next month to curb decades-high inflation. The government's report showed single-family housing starts declined 9.2% to an annualized 1.05 million rate, the slowest since 2020. Construction of multifamily dwellings plunged 23.7% to a 498,000 rate, the weakest since November. "Prices might keep going up for a while even in a world where rates are up."A separate report on Wednesday showed U.S. homebuilder sentiment slid to a two-year low in June as rising inflation and higher mortgage rates weighed on demand.
