In May, housing construction starts bottomed-out to a six year low, according to the U.S. Census Bureau, attributed to ongoing challenges such as construction costs and high mortgage rates triggered by rising inflation. The newest monthly update, however, shows a recovery—for at least one sector of the housing market.
The latest monthly new residential construction report from the U.S. Census Bureau found that, in June, privately-owned housing starts were at a seasonally-adjusted rate of 1.427 million. This is 19% higher than the revised May estimate (1.199 million starts) and is a 3.5% increase from the June 2025 reading of 1.379 million.
However, this upswing was driven primarily by growth in the multifamily sector; 513,000 starts with five units or more began in June. Single-family starts conversely saw a decline. In June, they were at a rate of 895,000, below the revised May figure of 897,000 and down 3.2% year-over-year. Underlining this difference, the rate of single-family construction sits at 582,000 units, while the rate of construction for apartments is at 682,000 units.
“For buyers, right now is still a great time to buy a new construction home, especially in Southern markets where the inventory continues to grow and builders are offering price cuts and incentives to boost sales,” Realtor.com® Senior Economist Jake Krimmel said in a statement, but he noted the long term readings inspire more pessimism.
“(T)epid permitting readouts do not inspire confidence in the country’s ability to close the 4 million home supply gap,” he added.
Building permits were down monthly and annually in June, with a rate of 1.367 million that was 3% below the revised May rate of 1.410 million and 2.3% lower annually. Single-family permits decreased monthly in June by 2.4% to 871,000 units and decreased annually by June 2025. Even multifamily building permits came in diminished at 496,000, down 4.2% monthly and down 5.7% annually.
Regionally, housing starts overall (meaning both single and multifamily) were higher in every major U.S. census region except the West, where starts declined by 4.4% annually. The Northeast saw the biggest annual jump in starts at 4.5%, followed by the South (1.7%) and then the Midwest (1.2%).
Industry reaction
“Elevated mortgage rates and higher construction financing costs continued to weaken builder confidence and housing demand,” said Bill Owens, chairman of the National Association of Homebuilders (NAHB) in a statement discussing the report results.
NAHB’s Assistant Vice President for Forecasting and Analysis Danushka Nanayakkara-Skillington added that “The monthly decline underscores the ongoing challenges facing residential construction despite a persistent shortage of available homes.”
Krimmell also pointed to low builder confidence in a statement: “As costs of construction rise and demand for newly built homes has proven softer than hoped for in recent years, and builders are not eager to launch new projects under these conditions.”
“Without meaningful acceleration to homebuilding, the high prices and limited options that plague buyers in many markets today will continue.”
In his statement, Owens also commented on the 21st Century ROAD to Housing Act, which recently became law: “The newly enacted housing bill includes key provisions to help builders increase supply, including streamlined regulations and incentives for local zoning reforms, but it will take time for these measures to take effect.”
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