New construction activity plummeted in the US last month, for whatever that’s worth to you.

On the headline starts print, it was worth an 11.4% drop, more than double the expected decline and the largest in a year.

The outsized plunge was attributable in large part to single-family construction, which dove an egregious 14.2% in government data released Thursday.

As the figure shows, that was the most pronounced month-to-month decline on that series since April of 2020, which is to say since the early days of the pandemic.

The breakdown showed a near 18% drop in single-family starts in the South, the biggest market.

This is the furthest thing from surprising. Builder sentiment’s very poor, having printed below the threshold separating net optimism from pessimism for a 12th month in April, and as the color accompanying Wednesday’s NAHB release made clear, the tariffs are an albatross.

The figure shows the NAHB headline plotted with the annual pace of single-family starts. New construction’s defied the gloom among builders at various intervals post-pandemic, but the reality is that this is a very challenging environment for buyers, and builders are sitting on a lot of newly-built inventory.

That latter point really is important. Whatever the supply picture looks like on the resale side of the market, there’s no shortage of new homes for sale. The opposite, in fact. Builders have more new inventory than at any point since 2007, and there’s a carrying cost associated with that. Why would you build more when you can’t sell what you already have?

What’s the problem with selling it? Well, for one thing, mortgage rates in the US are still “high” by the low standards of a generation accustomed to free money. The dramatic rise in Treasury yields last week drove rates up even further, and as Redfin noted, the rent versus buy calculus now “favors” (with the scare quotes to denote that renting is everywhere and always akin to burning money compared to buying) renting by a huge margin.

The figure shows the ballooning spread between the annual income needed to afford the median priced home (around $117,000) and the yearly pay required to afford the typical apartment (just a little more than $64,000).

“It has become increasingly challenging for American renters to make the shift to homeownership thanks to the triple whammy of rising home prices, high mortgage rates and a shortage of houses for sale,” Redfin Senior Economist Elijah de la Campa wrote, in a piece co-authored with Lily Katz.

For her part, Katz not-so-gently noted that “homebuyers, sellers and renters may face an extended period of economic uncertainty due to President Trump’s newly-announced tariffs [which] are expected to bring higher construction costs, higher home prices, higher unemployment and slower economic growth.”

Separately, Redfin said the typical house that went under contract in March was on the market for 47 days in the US. That was the longest of the pandemic era. In 2022, the typical home sat for just three weeks.