U.S. Construction Decreases 0.9% in May

-edited

The U.S. Department of Commerce released a report in May stating that U.S. construction declined in May.

Overall U.S. home construction declined in May due to a large drop in single-family construction paired with only a moderate increase in apartment building construction.

The Commerce Department released a May Report showing that construction origination decreased in most parts of the country. Construction origination decreased 45.5% in the Northeast, 8% in the Midwest and 2% in the West.

"Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers," said Robert Dietz, chief economist for the home builders.

The decrease of single-family home construction and increase of apartment building construction has been a growing trend. In April, single-family home construction decreased by 6.4% while apartment building construction increased by 10.9%.

However, economists believe that an aggregate construction rate surge will catch up with falling mortgage rates in the second half of the year despite current falling construction rates.

See complete story here.

Comments