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Economy in Brief

U.S. Housing Starts Fall Sharply in May
by Tom Moeller  June 16, 2022

• Starts level is lowest since April 2021.

• Both single- & multi-family weaken.

• Building permits fall to eight-month low.

New residential building activity is feeling the pressure from rising interest rates. Housing starts declined 14.4% during May (-3.5% y/y) to 1.549 million units (SAAR) from 1.810 units in April, revised from 1.724 million. The Action Economics Forecast Survey expected 1.71 million starts.

Single-family starts declined 9.2% (-5.3% y/y) last month to 1.051 million units from 1.157 million in April, revised from 1.100 million. Starts of multi-family units weakened 23.7% (+0.6% y/y) to 498,000 from 653,000.

By region, housing starts were mixed last month. Starts in the South declined 20.7% (-0.7% y/y) to 803,000. In the West, housing starts fell 17.8% (-10.1% y/y) to 356,000. Elsewhere, starts firmed. In the Northeast, starts surged 14.6% (26.3% y/y) to 173,000. Starts in the Midwest rose 1.9% (-17.5% y/y) to 217,000.

Building permits declined 7.0% (+0.2% y/y) to 1.695 million from 1.823 million in April. Permits to build single-family homes declined 5.5% (-7.9% y/y) in May to 1.048 million units. Permits to build multi-family weakened 9.4% (+17.0% y/y) to 647,000.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

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