US Housing Starts Plummet to 5-Year Low Amidst Buyer Hesitation

Housing Market Slowdown

• 📉 New home construction data for May shows a significant slump, with overall housing starts hitting their lowest point in five years.
• ⚠️ This downturn is attributed to homebuyers pulling back due to high costs, elevated interest rates, and economic uncertainty.

Single-Family vs. Multi-Family Construction

• 🏠 Single-family starts remained flat month-to-month and are down over 7% from the previous year.
• 🏢 Multi-family starts experienced a sharper decline, dropping over 30% month-to-month, influenced by a record supply of new apartment units delivered recently.

Future Indicators and Mortgage Demand

• 📈 Despite the current slump, permits for future construction are higher, suggesting potential future demand as people stay in rentals longer.
• 📊 Mortgage applications for home purchases, especially for newly built homes, have dropped year-over-year, reflecting buyer reluctance.

Interest Rates and Builder Sentiment

• 📊 Mortgage rates are hovering just below 7%, described as the "new normal".
• ⚠️ Builder sentiment has been notably weak, with a recent report indicating a weaker outlook from major homebuilders.