New home sales, which make up only about 10% of the market, fell 11.3% in May from the prior month, to 619,000, according to government data released Wednesday. That was the steepest monthly decline since September 2022 and marks the lowest level since November.
May’s level was below the 647,500 economists projected in a FactSet poll.
Housing starts fell 5.5% last month to a seasonally adjusted annual rate of 1.28 million units, the lowest level since 2020, also registering well below economists’ expectations. Building permits, seen as a bellwether of future construction, dipped 3.8%.
Housing shortage persists. Here’s what the US government is doing
High prices and elevated mortgage rates, coupled with the persistent housing shortage, have undermined this year’s critical spring homebuying season. US home prices rose in May for the eleventh consecutive month to $419,300, a record high on data going back to 1999, the National Association of Realtors said last week.
The Biden administration has laid out its own solutions to the country’s housing crisis. Treasury Secretary Janet Yellen on Monday announced $100 million in funding over the next three years “to support the financing of affordable housing,” according to a release. On Wednesday, Vice President Kamala Harris and Housing and Urban Development Acting Secretary Adrianne Todman announced $85 million in grant funding toward a housing program that “aims to identify and remove barriers to affordable housing production and preservation, and lower housing costs.”
Comments