Single-family permits, starts, completions, and homes under construction have shown significant declines in May, reflecting a challenging economic environment for homebuilders. High mortgage rates, elevated home prices, increasing inventory levels, and a renewed trade war are contributing factors. The U.S. mobility rate is notably low, indicating reduced interest from individuals and families in relocating. The South is experiencing the most significant downturn in new home construction, while the Midwest shows slight improvement. The overall housing market remains near historical low points, similar to previous crises, particularly affecting single-family home conditions.
"Falling construction activity reflects the litany of economic headwinds facing homebuilders. These include high mortgage rates, record-high home prices, rising inventory of existing homes for sale and the reignited trade war that economists fear will raise prices for construction inputs."
"The U.S. mobility rate, a measure of the share of the U.S. population that moves each year, is historically low. Many individuals and families are not interested in looking for a new place to live, whether as a homeowner or a renter."
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