WASHINGTON—U.S. single-family homebuilding and permits tumbled in March as soaring mortgage rates increased costs, but residential construction remains underpinned by a severe shortage of houses.
The report from the Commerce Department on Tuesday also showed a record backlog of homes approved for construction, but yet to be started. It followed on the heels of news on Monday that sentiment among single-family homebuilders dropped to a seven-month low in April.
The 30-year fixed mortgage rate has risen to 5 percent for the first time in over a decade as the Federal Reserve hikes borrowing costs to quell sky-high inflation. The housing market is the sector of the economy most sensitive to interest rates.
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