New Residential Construction Activity Weakens in May

New residential construction faltered in May, with both building permits and housing starts dropping. According to a report from real estate marketing platform Realtor.com, housing permits fell by 0.7% month-over-month in May and by 0.2% year-over-year. Meanwhile, starts declined by 15.4% month-over-month and by 8.7% year-over-year. Completions also came in 8.1% below last month and 14.2% below May of last year.

Most of the declines were caused by the multifamily market

Declines in new residential construction activity were primarily because of declines in the multifamily segment. Starts of units in projects of five units or more declined to the lowest level in over a year, 41.6% below last month and 12.3% below May of last year. Likewise, multifamily completions fell by 19.3% month-over-month and by 8.4% year-over-year.

Where are the greatest declines?

New residential construction activity was weakest in the South. There, starts fell by 15.4% year-over-year, and in the West, they fell by 11.4% year-over-year.