, Columnist
Homebuilders Urgently Need Fed Rate Cuts
Slumping new home construction and weak sentiment among developers bodes poorly for housing supply in the US.
Waiting on the Fed.
Photographer: Angus Mordant/Bloomberg
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New home construction slumped to the weakest level in four years in May, confirming a trend that’s been evolving for the past few months — residential construction is once again acting as a drag on economic growth in the US.
This should give the Federal Reserve more confidence that it’s appropriate to cut interest rates later this year. But it’s bad news for those hoping for an increase in supply to address America’s structural housing shortage. And it’s particularly bad news for communities dependent on smaller builders for more housing construction.