Multi-family boost drives housing start rebound in June

Single‐family housing starts in June fell to 883,000, their lowest rate in nearly a year and a 4.6% decrease from May. The decline was driven by elevated interest rates, rising inventories, and ongoing supply-side issues impacting the housing sector, the National Association of Home Builders (NAHB) said.

But there was a solid boost in multi-family production, a near 31% surge month on month (m/m) to 414,00 units (Figure 1, left).

“Single-family conditions are measurably weakening as resale inventories levels rise, particularly in previously fast-growing areas such as the US south,” said NAHB Chief Economist Robert Dietz.

“Single-family home building in the South is down 12.4% on a year-to-date basis, far outpacing declines in the Northeast and the West,” Dietz added. “However, single-family home building is up 10% on a year-to-date basis in the Midwest, where housing affordability conditions are generally better than much of the nation.”

Regionally, combined single-family and multi-family starts were split across most of the country from May to June (Figure 1, right). Starts dropped 8.1% m/m in the South and 0.6% in the West, while starts in the Northeast and Midwest increased 28.8% and 13.1%, respectively.

At the same time, the overall number of building permits for privately owned housing units improved 0.2% from May to June to a SAAR of 1.40 million units. Single-family building permits were 3.7% lower m/m, while multi-family permits rose 7.3%.