Housing starts fall

May’s pace of new construction starts for U.S. residential projects declined 9.8% from the prior month and fell 4.6% from a year earlier, pulled lower by multifamily construction, according to the latest figures from the Commerce Department and Department of Housing and Urban Development.

A total of about 1.3 million residential units were started, based on seasonally adjusted annual figures. Single-family starts rose 0.4% from the prior month while falling 7.3% from a year earlier, as multifamily projects with five or more units dropped 30.4% for the month but increased 5% from May 2024.

“Our latest builder survey shows that development and market conditions remain a major concern for builders, with consumer confidence lower and elevated interest rates for buyers and builders,” said Buddy Hughes, chairman of the National Association of Home Builders. “Almost 40% of homebuilders reduced sales prices in the last month in order to offset difficult housing affordability conditions.”

Many prospective homebuyers remained on the sidelines awaiting lower pricing and mortgage rates, with single-family construction starts down 7.1% year-to-date.