In May, the housing market saw a stark decline in both single-family and multifamily housing starts, largely due to soaring interest rates on construction loans and mortgages. According to the U.S. Department of Housing and Urban Development and Census Bureau, overall housing starts fell by 5.5% to an annual rate of 1.28 million units. Single-family starts dropped 5.2% to 982,000 units annually, despite a year-to-date increase of 18.8% from a weak early 2023 baseline.

Mortgage rates hit a high of 7.06% in May, the highest since November 2023, dissuading potential buyers. Meanwhile, the multifamily sector plummeted by 6.6% to 295,000 units annually, marking its lowest level since April 2020 amidst a prolonged development slowdown.