MetroIntelligence Economic Update by P. DUFFY
Housing starts fall 14.4 percent in May to lowest level since April 2020
Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,549,000. This is 14.4 percent below the revised April estimate of 1,810,000 and is 3.5 percent below the May 2021 rate of 1,605,000. Single‐family housing starts in May were at a rate of 1,051,000; this is 9.2 percent below the revised April figure of 1,157,000.
Building permits fall 7.0 percent in May but edge up 0.2 percent year-on-year
Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,695,000. This is 7.0 percent below the revised April rate of 1,823,000, but is 0.2 percent above the May 2021 rate of 1,691,000. Single‐family authorizations in May were at a rate of 1,048,000; this is 5.5 percent below the revised April figure of 1,109,000.
Federal Reserve hikes rates 75 basis points, sharpest increase since 1994 to fight inflation
As expected, the Federal Reserve raised its Fed Funds rate by 75 basis points to 1.50-1.75 percent to combat stubbornly high inflation while continuing to reduce their balance sheet of Treasury and mortgage-backed securities. They also updated their projections through 2024 to plan for higher unemployment and lower GDP growth, but lowered their inflation forecast for 2023 and 2024 given planned rate hikes moving forward.