U.S. single-family homebuilding fell in May amid continued high mortgage rates.

Single-family housing starts, which account for the bulk of homebuilding, declined 5.2% to a seasonally adjusted annual rate of 982,000 units last month, the Commerce Department's Census Bureau said Thursday.

Building permits, as well, fell 3.8%, while permits for future construction of single-family homes declined 2.9% to a rate of 949,000 units in May, ZeroHedge reports.

This was the third monthly drop in permits in a row. Even worse, April housing starts were revised lower from 5.7% to 4.1%.

This has pulled the seasonably adjusted annual rate (SAAR) for starts and permits to their lowest levels since housing cratered during COVID lockdowns.

The single-family SAAR for May was 982,000, down 4.8% from 1,031,000 in May of 2023 — the first print below the million mark since October 2023.

Multi-family SAAR of 278,000 was down 13.7% from 322,000 — and the lowest since March’s 245,000.

Meanwhile, multi-family permits fell to their lowest level since October 2018, with single-family permits of 949,000 down 2.9% from 977,000 month-over-month, and multi-family permits of 382,000 down 6.1% from 407,000.

The average rate on the popular 30-year fixed mortgage has continued to pull back after reaccelerating over 7% again in April and May. It eased to 6.95% last week, data from mortgage finance agency Freddie Mac showed, as softening labor market conditions put two rate cuts from the Federal Reserve this year back on the table.

With interest rate cut expectations at a low, there is no sign of a recovery in homebuilding yet.

This dire housing picture makes the Biden administration’s construction employment data questionable, at best.

Reality appears to be setting in for homebuilders.

With reporting by Reuters