Homebuilding Permits Tumble in April

The housing market is showing signs of cooling, as U.S. homebuilding permits dropped to a five-month low last month, Reuters reports. "Homebuilding was already being constrained by soaring prices as well as shortages of materials," the article reads. "The housing market is the sector of the economy most sensitive to interest rates, with building permits a leading indicator for the sector."

The housing sector is "caught between sharply rising mortgage rates and declining affordability on the one hand and supply-chain constraints on the other that continue to result in rising backlogs of projects," Conrad DeQuadros, senior economic advisor at Brean Capital in New York, told the news outlet.

However, rates for building permits are still higher than a year ago. "The release comes on the heels of a lower-than-expected measure of builder confidence released Tuesday. The National Association of Home Builders Housing Market Index, which gauges builders' view of the market for new single-family homes, fell eight points in May to its lowest level since June 2020," according to Barron's.