In May, privately owned housing starts fell to a seasonally adjusted rate of 1.277 million units, down 5.5% month over month and 19.3% compared to a year ago, according to data released Thursday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).
An annualized decline of 51.7% in multifamily housing starts, which fell to a pace of 278,000 units, is largely to blame for the sizable yearly decrease in total starts. But single-family housing starts also declined to 982,000 units, a 1.7% year-over-year decrease.
Industry experts attributed the large yearly decline in multifamily starts to the already high number of apartment buildings being completed, which leading to an easing of rent price growth.
“Builders are in an ‘if you build them, they won’t come,’ market, as continued high mortgage rates keep more potential buyers out of the market,” Robert Frick, a corporate economist at Navy Federal Credit Union, said in a statement.
The number of building permits issued in May also posted monthly and yearly declines, falling to a seasonally adjusted annual rate of 1.386 million units, down 3.8% month over month and 9.5% year over year.
Again, the multifamily sector is largely to blame, as it dropped to 382,000 units, down 6.1% from April and 31.4% from a year ago. The multifamily sector’s large yearly decline was partially offset by a 3.4% annual increase in the single-family sector (to 949,000 units), but this was down 2.9% from April.
