Key facts
- U.S. housing starts increased 19% to a seasonally adjusted annual rate of 1.3 million units in June.
- The surge was primarily driven by a 76.3% jump in multifamily construction starts.
- Single-family housing starts remained largely flat, decreasing slightly to 895,000 units.
- Building permits, an indicator of future construction, fell 3% to 1.367 million units.
- Single-family building permits also declined, down 2.4% to 871,000 units.
- Housing completions rose 3.3% to 1.39 million units in June.
Residential construction activity in the U.S. saw a significant increase in June, with housing starts jumping 19% to a seasonally adjusted annual rate of approximately 1.3 million units. This surge was predominantly fueled by a substantial 76.3% rise in the construction of multifamily buildings with five or more units, which reached a 513,000 annual rate.
However, the gains in housing starts mask a more nuanced picture. Single-family starts remained largely stagnant, experiencing a slight decrease to an 895,000-unit annual pace from 897,000 in May. Furthermore, indicators for future construction softened, as total building permits fell 3% from May to a 1.367 million annual rate. Single-family building authorizations also declined by 2.4% to 871,000 units.
Despite the headline increase in starts, homebuilder confidence remains in negative territory. Builders are contending with excess inventory and relying on incentives and price discounts, which has impacted profit margins. Experts suggest that the rebound in starts does little to alter the cautious outlook for single-family construction in the latter half of the year, as builders remain hesitant to initiate new projects amid affordability challenges and softer demand.
Privately owned housing completions also saw an increase, rising 3.3% to 1.39 million units in June, with single-family completions up 6.6% to 964,000 units.