Homebuilders are pulling back from construction as tariffs create uncertainty around costs alongside high mortgage rates. In May, housing starts tallied in at an annualized rate of 1.256 million, the lowest rate since the height of the coronavirus pandemic in May 2020. May’s housing starts also plummeted by 9.8% compared to April’s revised figure of 1.392 million and by 4.6% on an annual basis. Many home buyers have been locked out of the market as both interest rates and home prices remain elevated, increasing inventory in the process.
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
Housing Starts as a Leading Economic Indicator
Housing starts can be seen as a leading economic indicator given the large amount of investment needed to construct a house. In addition, they can provide insight into consumer confidence, as a buyer wouldn’t purchase a home unless they were financially stable and optimistic about the economy. As a result, the weak housing data could potentially be an early warning for investors.
Head over to TipRanks’ Stock Analysis and News feed for the latest breaking news.
