Macro Flash Report

Housing Starts & Building Permits

Takeaway: May’s Housing Starts and Building Permits both decreased below expectations, to their lowest levels in nearly 4 years. Recent data continues to underscore the negative impact of the high interest rate environment on the housing market.

Looking forward, the housing sector is likely to face strong headwinds in the near term as the NAHB (National Association of Home Builders) Housing Market Index for June, which was released earlier this week, dropped to its lowest point since December 2023. Throughout the report, sustained higher interest rates were frequently mentioned as the primary concern.

Housing Starts (white) & Building Permits (blue)

Housing Starts dropped by -5.5% to an annualized rate of 1277k, the lowest level since July 2020. This declined followed April’s downwardly revised figure of 1352k and fell short of the expected 1370k.

  • Single-family units fell by -5.2% to 982k, the lowest since October 2023.
  • Buildings with five or more units plummeted by -10.3% to 278k, reaching a two-month low.

Building Permits declined by -3.8% to an annual rate of 1386k, the lowest level since June 2020 and below the anticipated rise to 1450k from April’s 1440k.

  • Single-family authorizations decreased by -2.9%, hitting an eleven-month low of 949k.
  • Buildings with five or more units fell sharply by -6.1% to 382k, marking the lowest rate since May 2017.