New U.S. Home Construction Surges by Most in Three Decades in May
United States single-family starts surged in May, the most they had in more than three decades. Permits for future construction also rose, which suggests that the housing market is to turn a corner following a string of Federal Reserve interest rates hikes.
For the first time since early 2022, even with the Fed pausing rate hikes this month, credit conditions remain tightening, potentially making it challenging to keep pace with May’s rebound in the months to come for those builders heavily reliant on construction and development loans.
According to Reuters, housing starts rose to a seasonally adjusted annual rate of 1.631 million units last month from April’s downwardly revised 1.34 million, the Commerce Department said on Tuesday. May’s rate was the highest since April 2022, which was then the highest since 2006.
The 291,000-unit increase in starts was the most since January 1990, and the 21.7% rise was the largest percentage gain since October 2016.
