Housing starts in June were at a seasonally adjusted annual rate of 1.321 million, an increase of 4.6% compared with May but down 0.5% compared with June 2024, according to estimates from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
Most of the increase was due to a surge in multifamily housing starts.
Starts of detached single-family homes were at a rate of 883,000, a decrease of 4.6% compared with May. Starts of multi-family dwellings (five units or more per building) were at a rate of 414,000, an increase of 30.6% compared with the previous month.
Residential building permits were at an annual rate of 1.397 million, an increase of 0.2% compared with May but down 4.4% compared with June 2024.
Permits for single-family homes were at a rate of 866,000, a decrease of 3.7% compared with May while authorizations for multifamily units were at a rate of 478,000, an increase of 8.1%.
Housing completions were at an annual rate of 1.314 million, a decrease of 14.7% compared with May and down 24.1% compared with June 2024.
“Housing starts ticked up in June, narrowly exceeding consensus expectations,” says Odeta Kushi, deputy chief economist for First American, in a statement. “The increase was driven by a sharp jump in multifamily starts as single-family starts fell compared to May.”
“Single-family permits sagged for the fourth consecutive month as builders pull back amid mounting challenges, including ongoing affordability issues, rising material costs and tariff-related uncertainties, elevated new-home supply, and growing competition from the resale market,” Kushi says. “The continued decline in single-family permits, combined with weakened builder sentiment, points to a slowdown in future single-family construction.”
The good news is that home builder sentiment has increased slightly, after falling to the lowest level seen in decades. Helping to boost future sales expectations is the passage of the One Big Beautiful Bill Act, which “provided a number of important wins for households, home builders and small businesses,” says Buddy Hughes, chairman of the National Association of Home Builders (NAHB).
“While this new law should provide economic momentum after a disappointing spring, the housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates,” Hughes says in a statement.
“Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges,” says Robert Dietz, chief economist for NAHB, in a statement. “Single-family permits are down 6 percent on a year-to-date basis and builder traffic is at a more than two-year low.”
“Builder sentiment has signaled underlying weakness in the single-family sector,” Kushi says, noting that while builder sentiment inched higher in July, it remained in negative territory for the 15th consecutive month. “Optimism about single-family sales for the next six months increased by three points to 43, and current sales conditions improved by one point. Prospective buyer traffic declined from 21 to 20, marking the lowest reading since 2012, with the exception of three months.”
“Affordability challenges and tariff uncertainty continue to weigh on demand,” Kushi adds. “Builders are not only facing growing competition from the resale market, but also grappling with elevated inventories of their own. The months’ supply of new homes increased to 9.8 months in May – well above the pre-pandemic 30-year average of around 6 months, and up from 8.3 months in April.”
Photo: Avel Chuklanov