WASHINGTON – A measurement of US home construction fell in May, a new sign of weakness in the housing market.
Home start fell 0.9% in May from last month at a seasonally adjusted annual rate of 1 269 million, the trading department said Tuesday. There was a steep decline than the 0.4% reduction the economists had expected.
The report follows a decline in US homeowners' confidence in June, when builders reported concerns about rising construction costs and trade problems. The National Association of Home Builders housing market index fell to 64 this month from 66 in May, the trading group said on Monday.
Tuesday's housing data, "along with a constellation of other economic factors, can weigh on the Federal Reserve's scales if they want to reduce prices, which will potentially provide some incentive for the economy and the housing market," said John Pataky, executive vice president of TIAA Bank.
Fed officials meet Tuesday and Wednesday in Washington, and are expected to consider lowering interest rates if the economic outlook is to darken.
There were some bright spots in the Commerce Department's latest issue. is in the pipeline, rose 0.3% from April to an annual pace of 1[ads1] 294 million.This was the strongest monthly growth rate since December.The pace at the beginning of April was revised higher, another positive sign.
Home start data is volatile from month-to-month and may be subject to major revisions, mays 0.9% decline, with a margin of error of 12.9 percentage points.
Home construction has been cooled ice dry degree, as the general housing sector has struggled with high prices and low holdings, even with a strong labor market and rising incomes. Starter was 4.7% from May last year.
Borrowing costs have fallen in recent weeks, which can help the sales season this summer. A 30-year fixed rate mortgage averaged 3.82% for the week ending Thursday, according to Freddie Mac, near historic downs and down from 4.62% a year ago. The National Association of Realtors will release existing sales data for May on Friday.
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