Housing starts rose 5.7% to an annual rate of 1.36 million, following downward revisions in previous months, according to government data released. The median forecast in a Bloomberg survey of economists was 1.42 million.
Permits authorized for the construction of single-family homes have declined for three consecutive months to the lowest level since August, after an upward trend at the end of last year. This could limit the start of home construction in the future.
Building permits for all units, an indicator of future construction, fell 3% to a rate of 1.44 million, the lowest since late 2022. This primarily reflects a significant drop in authorizations for apartment complexes.
Early-year data indicated that inflation was proving stubborn, leading traders to retract their bets on when the Federal Reserve would cut interest rates this year and, consequently, to keep mortgage rates above 7%.
However, the figures showed that consumer price growth slowed in April, and additional readings may help give policymakers the confidence they need to start lowering borrowing costs. This could also boost the sentiment of homebuilders.
