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Privately owned housing starts in May were at a seasonally adjusted annual rate of 1,549,000, which is 14.4% below the revised April estimate of 1,810,000 and 3.5% below the May 2021 rate of 1,605,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

Single‐family housing starts in May were at a rate of 1,051,000, or 9.2% below the revised April figure of 1,157,000. The May rate for units in buildings with five units or more was 469,000.

"The housing market continues to show signs of softening as new residential construction continued to slow," says Nikolas Scoolis, manager, housing economics for Zonda. "Single-family starts fell for the third consecutive month, dropping 9.2% from April, and now sit at the lowest level since August 2020. At the same time, many builders across the country are still experiencing developmental delays, total units authorized but not yet started are up 14.1% year over year."

Housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,695,000, which is 7% below the revised April rate of 1,823,000 but 0.2% above the May 2021 rate of 1,691,000. Single‐family authorizations last month were at a rate of 1,048,000, or 5.5% below the revised April figure of 1,109,000. Authorizations of units in buildings with five units or more were at a rate of 592,000.

May’s housing completions were at a seasonally adjusted annual rate of 1,465,000, which is 9.1% above the revised April estimate of 1,343,000 and 9.3% above the May 2021 rate of 1,340,000. Single‐family housing completions last month were at a rate of 1,043,000, or 2.8% above the revised April rate of 1,015,000. The May rate for units in buildings with five units or more was 417,000.

“One encouraging sign from this report is the 9.1% jump in completions, which hit its highest rate since 2007, though a significant portion of the completions came from buildings with five-plus units,” says Doug Duncan, chief economist at Fannie Mae. “Still, this could be a sign that construction backlogs due to labor and materials shortages may finally be easing. Though significantly higher mortgage rates will undoubtedly weigh heavily on affordability and demand, continued above-normal profit margins reported by many builders suggests that they will likely have room going forward to increase incentives and make price concessions to sustain sales.”