Housing Starts: Downward Acceleration

Bottom Line:  Housing starts fell even more than expected in May as mortgage rates rose sharply. While there were upward revisions, this report showed a sudden slowdown in activity as builders appear to have finally reacted to higher mortgage rates. Single- and multi-family activity was notably lower with single-family dropping to a post-pandemic low, while multi-family starts held just above the lows seen last July. Starts in the South, where we've seen a massive building boom, were particularly weak. Finally, permits were lower again, suggesting activity has likely slowed further this month and will likely continue to slow modestly in the coming months.Total US Annualized Housing Starts FELL 261k to 1.55M, BELOW the 3-Month average of 1.69M, BELOW the 6-Month average of 1.71M, and 56k BELOW the year-ago level.
 
Single-Family Housing Starts FELL 106k to 1.05M, BELOW the 3-Month average of 1.13M, BELOW the 6-Month average of 1.16M, and 59k BELOW the year-ago level.

Multi-Family Housing Starts FELL 172k to 469k, BELOW the 3-Month average of 540.33k, BELOW the 6-Month average of 534.17k, and 16k BELOW the year-ago level.
 
Total Building Permits FELL 128k to 1.7M, BELOW the 3-Month average of 1.8M, BELOW the 6-Month average of 1.83M, nearly in line with the year-ago level of 1.691M.Single-Family Permits Housing Starts FELL 61k to 1.05M, BELOW the 3-Month average of 1.11M, BELOW the 6-Month average of 1.14M, and 90k BELOW the year-ago level.

Multi-Family Permits for Two-Four Unit Housing Starts FELL 1k to 55k, BELOW the 3-Month average of 55.67k, BELOW the 6-Month average of 57.67k, and 4k BELOW the year-ago level.

Multi-Family Permits for 5+ Unit Housing Starts FELL 66k to 592k, BELOW the 3-Month average of 636.67k, BELOW the 6-Month average of 634.33k but 98k ABOVE the year-ago level.