FX.co ★ US housing starts drop by 5.5% in May

New residential construction in the United States fell by 5.5% to an annual rate of 1.092 million in May 2017 from the previous month. This marks the lowest level since September 2016.

The revised estimate for April showed a 2.8% decline to 1.156 million from the 2.6% fall to 1.172 million originally reported.

Analysts had expected housing starts to rise by 4.1% to 1.220 million.

Meanwhile, building permits also tumbled by 4.9% to an annualized rate of 1.168 million in May. Economists had predicted a 1.7% increase to 1.249 million.

According to experts, the weakness of the US housing market in the second quarter is obvious. Most of the decline affected southern states, where construction fell to the lowest level since 2015. The main negative factor is lack of construction sites and skilled workers in the construction sector.

Single-family housing starts fell by 3.9% to a rate of 794,000 in May, while volatile multi-family starts decreased by 9.7% to a rate of 298,000.