Housing Market Faces Continued Slowdown as Construction Permits Drop

The US single-family housing market experienced a decline in May, with homebuilding falling by 5.2%, as high mortgage rates continue to impact the sector. According to data from the Commerce Department’s Census Bureau, single-family housing starts dropped to a seasonally adjusted annual rate of 982,000 units.

Despite the downturn, April’s data was revised upward, showing a slight increase in the number of single-family starts to 1.036 million units. The easing of the 30-year fixed mortgage rate to 6.95% offers some relief, which, combined with improved labor market conditions, could potentially lead to rate cuts from the Federal Reserve later this year.

However, permits for future single-family construction also fell by 2.9%, further signaling a slowdown in the housing market.