Single-family homebuilding fell 1.9% in May to the lowest level since September, signaling continued weakness in residential investment.
U.S. housing starts slumped to a six-year low in May, driven by a 1.9% decline in single-family homebuilding to an annual rate of 882,000 units. Higher mortgage rates and elevated building material costs pressured builders, while labor shortages and limited lots exacerbated the slowdown.
Residential investment has contracted for five consecutive quarters, and homebuilder sentiment deteriorated further in June. The South and West regions saw declines, while the Northeast and Midwest posted gains. Overall housing starts also fell sharply.
The data suggests the housing sector will remain a drag on economic growth in the second quarter, with little sign of near-term recovery amid high inventories and weak demand.