ar-over-year
declines
occurred
at
every
stage
of

construction,
with
single-family
permits
(-6.2%),
starts
(-12%),
under
construction
(-7.1%)
and
completions
(-16.6%)
all
showing
substantial
decreases.

“The
April
report
was
not
a
great
one
for
single-family
housing,”


First
American
deputy
chief
economist
Odeta
Kushi
said
in
a
statement.
“The
slower
pace
of
single-family
permits
suggests
a
reduced
rate
of
single-family
groundbreaking
in
the
upcoming
months,
due
to
higher
inventory
levels
in
key
markets
and
ongoing
challenges
with
costs
and
affordability.”

The
declines
are
largely
driven
by
the
South,
which
makes
up
the
vast
majority
of
single-family
construction.
Permits
(-9.1%),
starts
(-14.8%),
under
construction
units
(-8.3%)
and
completions
(-14.5%)
all
took
a
major
dive.

The
lack
of
production
tracks
with
the


National
Association
of
Home
Builders
(NAHB)/Wells
Fargo
Housing
Market
Index
(HMI),
which
measures
homebuilder
sentiment.
The
index
for
May

dropped
from
40
to
34,
the
lowest
reading
since
December
2022.
Readings
above
50
indicate
more
positive
views
than
negative
ones.

New-home
sales
have
been
a
relative
bright
spot
in
the
housing
market,
but
builders
souring
on
macroeconomic
conditions
have
the
potential
to
end
that.
Trump’s
ever-shifting
tariffs
have
made
life
difficult
for
builders.

The
president’s

reduction
of
the
tariff
rate
on
China
to
30%
is
a
huge
win,
as
builders
source
appliances
from
China.
But
the
reduction
is
only
in
effect
for
90
days.
The
pause
on

global
tariffs
announced
April
2
that
caused
markets
to
crash
is
also

temporary.
A
25%
tariff
on
all

steel
and
aluminum
imports
remains
in
effect.

Mortgage
rates
also
continue
to
be
an
obstacle
for
builders
and
the
broader
housing
market,
with
30-year
fixed
rates
currently
at
6.9%.

“Economic
uncertainty,
especially
around
interest
rates
and

inflation,
continues
to
impact
both
builder
financing
costs
and
buyers’
ability
to
qualify,”
said
Danushka
Nanayakkara-Skillington,
NAHB’s
assistant
vice
president.

“However,
recent
developments
on
the
tariff
front
concerning
the
United
Kingdom
and
China
along
with
major

tax
legislation
advancing
in

Congress
should
provide
a
boost
to
housing
demand
and
positive
momentum
for
the
economy.”