"Despite copious media stories of a general lack of housing supply and never-ending home price gains, we instead see renewed signs of fading housing demand that have homebuilders increasingly pulling back on their current and future building plans," wrote Scott Anderson, chief U.S. economist of BMO Economics.

April single-family home sales were down 7.7% year-over-year, with the drop looking "sustained and not a one-off event as a clear downtrend in housing demand appears to be re-establishing itself."

The National Association of Home Builders said that housing starts were down 5.5% between April and May to a seasonally adjusted 1.28 million units. Year-to-date, "single-family starts are up 18.8%, albeit off weak early 2023 data," NAHB noted. "The multifamily sector, which includes apartment buildings and condos, declined 6.6% to an annualized 295,000 pace. This is the lowest pace for apartment construction since April 2020."