Single-Family Starts Fall to Two-Year Low
Increased interest rates , building material supply chain bottlenecks and elevated construction costs continue to put a damper on the single-family housing market . For the first time since June 2020 , both single-family starts and permits fell below a 1 million annual pace . Overall housing starts fell 2.0 % to a seasonally adjusted annual rate of 1.56 million units in June from an upwardly revised reading the previous month , according to a report from the U . S . Department of Housing and Urban Development and the U . S . Census Bureau . The June reading of 1.56 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months . Within this overall number , single-family starts decreased 8.1 % to a 982,000 seasonally adjusted annual rate . This is the lowest singlefamily starts pace since June 2020 . The multifamily sector , which includes apartment buildings and condos , increased 10.3 % an annualized 577,000 pace . “ Single-family starts are retreating on higher construction costs and interest rates , and this decline is reflected in our latest builder surveys , which show a steep drop in builder sentiment for the singlefamily market ,” said Jerry Konter , chairman of the National Association of Home Builders ( NAHB ) and a home builder and developer from Savannah , Ga . “ Builders are reporting weakening traffic as housing affordability declines .” “ While the multifamily market remains strong on solid rental housing demand , the softening of single-family construction data should send a strong signal to the Federal Reserve that tighter financial conditions are producing a housing downturn ,” said NAHB Chief Economist Robert Dietz . “ Price growth will slow significantly this year , but a housing deficit relative to demographic need will persist through this ongoing cyclical downturn .” On a regional and year-to-date basis , combined single-family and multifamily starts are 4.4 % lower in the Northeast , 4.7 % higher in the Midwest , 11.1 % higher in the South and 0.4 % lower in the West . Overall permits decreased 0.6 % to a 1.69 million unit annualized rate in June . Single-family permits decreased 8.0 % to a 967,000 unit rate . This is the lowest pace for single-family permits since June 2020 . Multifamily permits increased 11.5 % to an annualized 718,000 pace . Looking at regional permit data on a year-to-date basis , permits are 5.1 % lower in the Northeast , 2.5 % higher in the Midwest , 2.9 % higher in the South and 3.0 % higher in the West .
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