Overall housing starts decreased 15.4% in May for a seasonally adjusted annual rate of 1.18 million units, according to the National Association of Home Builders’ analysis of data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Single-family starts fell 1.9% month-over-month and 6.7% year-over-year to a seasonally adjusted 882,000 homes, while multifamily starts dropped 40.2% from April and 14.2% year-over-year for an annualized rate of 295,000 units.
"The decline in housing starts aligns with NAHB’s latest builder survey, which showed builder sentiment weakening further in June,” NAHB Chairman Bill Owens said. “Elevated mortgage rates, affordability challenges and cautious buyers continue to weigh on demand for new homes. Builders are offering incentives and cutting prices, but difficult market conditions are still limiting sustained momentum for new construction."
Regionally, overall housing starts on a year-to-date basis were up 17.5% in the Northeast, down 4.1% in the Midwest, down 1.6% in the South and down 4.9% in the West.
“Year-to-date declines in single-family housing starts and permits underscore the continued challenges in the housing market,” Jing Fu, NAHB’s senior director of forecasting and analysis, said. “While the Midwest has shown some resilience, lower permit activity indicates builders remain cautious about future construction amid economic uncertainty and affordability pressures."
Read the full report here.
