Sales of newly built homes in the US dropped by 11.3% in May due to elevated mortgage rates, the steepest decline since September 2022. High interest rates and a lack of affordability are deterring potential buyers, with home prices reaching a record high of $419,300. The housing shortage is also impacting construction, with housing starts falling by 5.5% last month, the lowest level since 2020. The Federal Reserve may only cut rates once this year, depending on inflation trends. To tackle the housing crisis, the Biden administration is investing in affordable housing projects and removing barriers to housing production. The high housing costs are a major concern for American households, and solutions include capping rent increases and reducing mortgage insurance premiums. The housing market is facing challenges that the government is working to address effectively.