May housing starts fell sharply below forecasts, signaling a potential slowdown in the residential construction sector.
US housing starts dropped to a seasonally adjusted annual rate of 1.177 million in May, down 15.4% from April and well below the 1.430 million estimate. The decline follows a downwardly revised 1.465 million starts in April, previously reported at 21.392 million.
Building permits, a forward-looking indicator, reached 1.413 million, slightly below the 1.420 million estimate and down 0.7% from April’s 5.8% gain. The data suggests weakening demand in the housing market amid higher borrowing costs and economic uncertainty.
The report highlights a sharper-than-expected contraction in residential construction activity, raising concerns about broader economic growth.