Housing starts decreased 14.4% in May to a seasonally adjusted annual rate of 1.549 million units, according to reuters.com. Economists expected starts to fall to a rate of 1.701 million units.
Housing starts were down 3.5% compared with May 2021. Applications for building permits, a good indication of future activity, fell 7% to 1.695 million units in May.
Single-family housing starts fell 9.2% as mortgage rates climbed, and the rate for multifamily starts dropped 23.4% to 469,000 units.
The 30-year fixed-rate mortgage averaged 5.65% during the week ending June 17—the highest since November 2008.
The number of single-family homes authorized for construction but not yet started rose 0.7%, and the single-family housing backlog was unchanged from April, which was the highest level since 2006.