By Robert Dietz | Eye On Housing
Single-family starts declined further in May, as higher interest rates weighed on housing affordability. This follows a sixth straight monthly decline for the NAHB/Wells Fargo HMI. Additionally, the cost and availability of materials, lumber, labor and lots remain key supply-side headwinds. Single-family permits decreased 5.5% to a 1.05 million unit rate in May. Despite declines for housing affordability, a lack of resale inventory continues to partially support demand for home construction.
Overall housing starts declined to 1.55 million units on an annual basis in May, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The decline was due to weakening for single-family and multifamily construction. The May reading of 1.55 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months.
Within this overall number, single-family starts decreased 9.2% to a 1.05 million seasonally adjusted annual rate. The multifamily sector also fell back off extremely strong April numbers, declining 23.7% in May to a more sustainable 498,000 annualized rate of starts.