Housing starts rose in June on a monthly and yearly basis, buoyed by higher levels of multifamily construction, according to HUD and the U.S. Census Bureau’s latest residential construction report released Friday.
The seasonally adjusted June starts rate for buildings with five units or more was 513,000, per the report. Those multifamily starts were up 19.3% year over year and 76.3% higher than May. The multifamily segment had the strongest construction performance in April and the weakest showing in May before it regained strength last month.
Multifamily building permits, which signal future construction activity, were at a seasonally adjusted rate of 445,000 in June, down 6.3% YOY. Multifamily project completions were also down last month, by 5.1% YOY, coming in at a seasonally adjusted rate of 413,000.
That’s good news for the apartment industry, which has been eager for the recent wave of new supply to moderate and be absorbed.
Total privately owned housing starts stood at a rate of 1.43 million units, 19% higher than the revised May estimate, and 3.5% above the June 2025 rate of 1.38 million. Single-family housing starts stood at a rate of 895,000 in June, down 3.2% YOY.
By region, the Midwest had the strongest showing, with overall housing construction up 29.2% YOY, followed by the South, which was up 5% from June 2025. In contrast, new housing construction fell the most in the Northeast, down 24.6% YOY, while activity was relatively flat in the West, ticking down 0.3% YOY.
High financing costs, mortgage rates weigh on builders
Elevated mortgage rates and higher construction financing costs continued to weaken builder confidence and housing demand in June, according to Bill Owens, chairman of the National Association of Home Builders and a home builder and remodeler in Worthington, Ohio.
Help may be on the way from the federal government, per Owens, but not in the short term.
“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,” Owens said in the NAHB’s Friday release.
Rising construction costs and persistent labor shortages also continued to weigh on home builders, per NAHB.
Although construction input costs ticked down 1.1% month over month in June as oil prices moderated, those costs will likely rise again in coming months, according to an analysis of the latest economic data by Associated Builders and Contractors.
“Ongoing materials price escalation is likely over the coming months,” Anirban Basu, ABC’s chief economist, said in a release. “The conflict in Iran has resumed, triggering a roughly 15% rebound in oil prices, and tariff-affected commodities like iron, steel and copper continue to experience steep price increases.”
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