Housing starts, a measure of new home construction, came in far beyond expectations that they would decline by 0.1%, according to data released Tuesday by the Census Bureau. The number of single‐family units rose in May to 1.631 million, above expectations for 1.40 million and above the revised April estimate of 1.34 million. Building permits, which track the number of new housing units granted permits, also rose in May, after dropping in March and April. Permits were up 5.
“The Federal Reserve nearing the end of its tightening cycle is also good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans.” Dietz added that the Federal Reserve and Washington policymakers must take into consideration how the state of home building is critical for the inflation outlook and the future of monetary policy.