The Census Bureau, Washington, D.C., reported that privately owned housing starts in May were at a seasonally adjusted annual rate of 1,277,000, 5.5% below the revised May estimate.
Permits were down 3.8% in May.
“Overall lower housing production correspond with our latest industry surveys, which show builders are concerned with a high interest environment that is making it harder to get acquisition, development and construction loans to increase home building activity,” says Carl Harris, chairman of the National Association of Home Builders and a custom home builder from Wichita, Kansas. “Higher rates for builder and developer loans, along with ongoing supply-side challenges regarding construction labor and buildable lots, are acting as headwinds for new home and apartment construction.”
The Federal Reserve voted to keep interest rates steady in June at 5.25% to 5.5%.
“In recent months, inflation has shown a lack of further progress toward our 2% objective,” says Jerome Powell, chairman of the Board of Governors of the Federal Reserve System at a May 1 news conference. “It is likely that gaining greater confidence will take longer than previously expected.”
