U.S. housing starts fell sharply in May, plunging 15.4% to a seasonally adjusted annual rate of 1.177 million, according to the Census Bureau. The figure significantly missed market expectations of 1.43 million and represents an 8.7% decline from the same period last year. The drop was primarily driven by a steep contraction in the volatile multi-family sector, which plummeted to an annual rate of 284,000 units compared to 529,000 in April.
Building permits, a gauge of future construction, also edged lower to 1.413 million, slightly missing the 1.42 million consensus. While single-family authorizations saw a marginal 0.6% increase, overall activity remains constrained by high borrowing costs and affordability challenges. The sharp miss across both metrics signaled continued cooling in residential investment, weighing on the U.S. dollar in early Tuesday trading.