Key facts
- U.S. single-family housing starts fell to an eight-month low of 882,000 units in May.
- Overall housing starts reached a six-year low of 1.177 million units.
- Import prices rose 1.9% in May, with an annual increase of 6.7%.
- Higher mortgage rates and building material costs are pressuring the housing market.
- Imported fuel prices increased significantly, while imported capital goods prices also rose.
U.S. single-family homebuilding fell to an eight-month low in May, pressured by higher mortgage rates and building material prices, suggesting the housing market could remain a drag on economic growth in the second quarter. The decline, combined with a plunge in multi-family housing starts, pushed overall homebuilding to a six-year low last month.
Single-family housing starts, which account for the bulk of homebuilding, fell 1.9% to a seasonally adjusted annual rate of 882,000 units, the lowest since last September. Residential investment, which includes homebuilding, has contracted for five straight quarters. Permits for future single-family construction rose 0.6% to 886,000 units.
Starts for housing projects with five units or more plunged 41.6% to a rate of 284,000 units. Overall housing starts dropped 15.4% to a pace of 1.177 million units. Building permits for multi-family housing projects fell 3.5% to 474,000 units, and overall building permits slipped 0.7% to 1.413 million units.
A separate report from the Labor Department showed import prices increased 1.9% in May, lifted by more expensive fuels and capital goods, after an upwardly revised 2.0% jump in April. Prices of imported fuel increased 12.5% last month, while prices of imported capital goods rose 1.3%. In the 12 months through May, import prices advanced 6.7%, the largest increase since August 2022.