With housing inventories at recent highs, the US housing market just suffered another sentiment setback as Housing Starts crashed by 15.4% MoM in May (far worse than 2% drop expected and worse since March 2024)), following a revised 8.5% MoM drop in April. Building Permits slipped 0.7% MoM (in line with expectations)...

Source: Bloomberg

That pulls the Housing Starts SAAR to its lowest since COVID (after reaching the highest since 2024 in April)...

Source: Bloomberg

Under the hood, it was multi-family (rental) starts that collapsed:

Source: Bloomberg

Did 'renter nation' just die?

Multifamily permits also fell...

Is homebuilder sentiment about to slump even further...

Source: Bloomberg

It seems recent rises in the mortgage rate (and inventories already at over-stuffed levels, given the slowness of sales) has finally dented the homebuilders' self-satisfying confidence.