Construction of new houses fell slightly in April for the second month in a row, suggesting that rising mortgage rates, record home prices and the high cost of building materials are starting to bite. Housing starts dipped 0.2 % to an annual pace of 1.72 million. That’s how many homes would be built in 2022 if construction took place at same rate over the entire year as it did in April. New construction rose to a nearly 16-year high in February before backsliding in the past two months. The number of permits, meanwhile, slipped 3.2% to a 1.82 million rate. Permits foreshadow how many houses are likely to be built in the months ahead assuming a stable economy. They hit a 15-year high at the end of last year as mortgage rates tumbled to record lows, but permits have since leveled off.
How well is the American consumer holding up against sky-high inflation? It depends on whom you ask. Four major retailers — Walmart, Target, Home Depot and Lowe’s — reported quarterly financial results this week, and they each offered a different perspective on where and how people are spending their money. Walmart said some of its more price-sensitive customers are beginning to trade down to private-label brands, while Home Depot emphasized the resiliency among its customer base, a sizable percentage of which is professional home builders and contractors. The reports came after Amazon in late April flashed warning signs for the retail industry when they booked the slowest revenue growth for any quarter since the dot-com bust in 2001 and offered up a bleak forecast. Still, expectations on Wall Street were higher this week for both Walmart and Target. Analysts and investors didn’t anticipate that the two big-box retailers would take such a massive hit to their profit. Walmart closed Tuesday down 11.4%, marking its worst day since October 1987, while Target had its worst day in 35 years.