U.S. new-home construction slowed less than expected in May, a sign that a recent decrease in 30-year mortgage rates might be making housing more affordable, especially in an economy with unemployment at its lowest in a half century.
Builders started 1.269 million new home-construction projects during May, the Census Bureau said Tuesday in a report. That's down from the prior month's 1.29 million housing starts. But the figure still exceeded analysts' expectations for 1.245 million new projects in May, based on a survey of economists by the data provider FactSet.
As a Federal Reserve meeting begins Tuesday to evaluate official U.S. interest rates, currently set in a range from 2.25% to 2.5%, investors are scouring economic reports for signs of strength -- or weakness.
Most Wall Street forecasters agree that President Donald Trump's economy is slowing from last year's 2.9% clip, partly due to concerns over the intensifying trade war with China. The question is how quickly.
Trump, who campaigned in 2016 on promises of "jobs, jobs, jobs," has claimed credit for a decline in the unemployment rate to 3.6%, from an already-low 4% a year ago.
But the Federal Reserve's decision so far this year to refrain from further interest-rate changes might also be helping to stabilize activity.
According to Bankrate, the average 30-year fixed mortgage rate in the U.S. declined to 4.2% at the end of May, from 4.44% as recently as March.