New housing starts fell 5.5% to a seasonally adjusted annual rate of 1,277,000 units, 19.3% below May 2023 levels, according to U.S. Census data released Thursday.
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New data released Thursday morning by the U.S. Census Bureau shows housing starts fell in May as builders pulled back from new projects.
The data showed that new housing starts fell 5.5% between April and May to a seasonally adjusted annual rate of 1,277,000 units, 19.3% below May 2023 levels.
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“With more homes completed and no clear direction for interest rates, builder confidence has declined and many have scaled back the launch of new projects,” Zillow senior economist Orphe Divounguy said in a statement.
The slowdown in new construction comes at a time when builders typically ramp up construction, which Divinge attributed to builders’ caution about rising interest rates and their impact on housing demand.
“The slowdown in single-family housing starts may reflect builders’ caution about the outlook, primarily as higher interest rates lead to a easing of demand for housing during a time of year that is typically expected to accelerate,” he said.
The seasonally adjusted annual rate of housing units authorized for building permits in May was 1,386,000 units, 3.8% below April levels and 9.5% below permit levels recorded in May 2023, according to Census data .
Housing completions fell 8.4% between April and May to a seasonally adjusted annual rate of 1,514,000 units, 1% higher than the May 2023 rate.
“Builders continue to add to their inventory. In May, single-family home completions were still about 1% higher than a year ago. With more homes coming on the market and home sales not growing as much, the total inventory of homes for sale is higher than a year ago.
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