Key facts
- New home construction in the U.S. reached a six-year low in May.
- Multifamily starts fell 40.2% from April to an annualized pace of 295,000.
- Overall housing starts were below 1.2 million units annually.
- Home prices decreased by 0.4% in April month-over-month.
- Home sales declined 0.7% in May and 6.3% year-over-year.
- Single-family housing starts and permits are down 6-7% year-over-year.
New home construction in the U.S. experienced a significant downturn in May, reaching its lowest point since the early stages of the COVID-19 pandemic. This decline is expected to further intensify the challenges faced by prospective homebuyers in an already difficult market.
Data released in June indicated that home prices in the U.S. fell by 0.4% in April compared to the previous month, according to S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency. Home sales also saw a decrease, dropping 0.7% in May and 6.3% year-over-year, as reported by the United States Census Bureau. Homebuilders are responding to these sluggish market conditions by scaling back new construction. Both single-family starts and permits are down 6-7% from the previous year.
Multifamily starts, which include apartment buildings and condos, saw a dramatic 40.2% decrease from April to an annualized pace of 295,000 units. This represents a 14.2% drop compared to May of the previous year. Overall housing starts, encompassing both single-family and multifamily construction, fell below an annualized rate of 1.2 million units, significantly underperforming economists' expectations.