US Housing Starts Drop to the Weakest Pace Since 2020

US housing starts fell to their slowest pace in over four years in May, reaching an annualized rate of 1.28 million units, according to data released by the U.S. Census Bureau and the Department of Housing and Urban Development on June 18, 2024. This figure represents a 5.5% decrease from the revised April rate of 1.35 million units and marks the lowest level since April 2020. The decline was primarily fueled by a significant drop in the construction of apartment buildings, which saw starts decrease by 15.7% to a seasonally adjusted annual rate of 332,000 units. Single-family home construction, however, showed resilience, increasing by 1.9% to 977,000 units. Permits for future construction also declined, falling 3.8% to 1.39 million units, with single-family permits rising 0.5% and multifamily permits dropping 10.4%. This slowdown in residential construction indicates a cooling housing market, potentially influenced by higher interest rates and ongoing affordability challenges.