The numbers: Construction started on new U.S. homes fell 14.4% in May, the Commerce Department said Thursday. The annual rate of total housing starts fell to 1.55 million last month from a revised 1.81 million in April.
Economists polled by the Wall Street Journal expected housing starts to fall to a 1.68 million rate from April’s initial estimate of 1.72 million.
Permitting for new homes fell 7% to 1.7 million in May from a revised 1.82 in the prior month.
Economists expected building permits to fall to a 1.78 million rate from April’s initial estimate of 1.82 million.
Key details: The construction pace for single-family homes fell 9.2% in May, while apartment starts fell 26.8%.
Permits for single-family homes fell 5.5% in May, while permits in buildings with at least five units fell 10%.
Big picture: The trend in single family starts is downward, said Richard Moody, chief economist at Regions Financial, as higher mortgage interest rates will likely slow demand.
Market reaction: The yield on the 10-year Treasury note
rose to 3.47% in the wake of the Fed’s aggressive rate hike Wednesday. Stocks
were set to open lower.