The number of new homes being built in the US tanked 14% in May — it'll make buying or renting even more of a nightmare
housing startsslid 14% to an annual rate of 1.55 million units in May, the Census Bureau said.
- That's below the average forecast of 1.7 million units and marked the slowest pace since April 2021.
Homebuilders are slowing their roll — and that means it'll be even harder for Americans to find affordable homes.
During May, single family
Multifamily construction — units in buildings with five households or more — fell by 26.8%, marking the largest one-month decline since August 2020. That slowdown risks constraining rental supply and keeping rent inflation elevated.
"Single-family home building is slowing as the impacts of higher interest rates reduce housing affordability," Jerry Konter, chairman of the National Association of Home Builders, told Insider. "As the market weakens due to cyclical factors, the long-term housing deficit will persist and continue to frustrate prospective renters and home buyers."
Building permits — regarded as a forward indicator for
"Home builders pulled back from getting permits and starting construction in May. That's not a hopeful sign for a country suffering from a housing shortage," Holden Lewis, Mortgage Expert at NerdWallet, told Insider. "The number of dwellings under construction is at its highest level since the 1970s, partly because builders don't get their hands on materials to complete homes."
The Thursday report offers little solace for Americans hoping for the
As housing construction fell in May, the median listing price of a home climbed 14.8% to $430,621, according to Redfin. In the rental market, rents reached a record high of $2,002, rising 15% from the same time period in 2021. May's readings are a reminder that whether you are a renter or buyer, housing affordability is still cause for concern.
"More people are opting to live alone, and rising mortgage-interest rates are forcing would-be homebuyers to keep renting," Taylor Marr, deputy chief economist at Redfin, said in a statement. "These are among the demand-side pressures keeping rents sky-high."
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