June housing starts jump 19%, fueled by strong multifamily gains

Residential construction activity picked up in June, but the gains were concentrated in multifamily, and future supply indicators softened, according to newly released U.S. Census Bureau data. 

Privately owned housing starts rose to a seasonally adjusted annual rate of roughly 1.3 million units in June, up 19% from a revised May pace of roughly 1.12 million and 3.5% above the June 2025 rate of 1.38 million. 

“On the surface, the report suggests residential construction remains resilient despite elevated mortgage rates and ongoing affordability challenges,” Odeta Kushi, Deputy Chief Economist at First American Financial Corporation, said in a statement. 

“The headline, however, overstates the strength in homebuilding,” Kushi added, arguing that the positive data reflected a temporary surge in multifamily construction.  

Single-family starts held roughly steady, falling slightly to an 895,000-unit annual pace from 897,000 in May. On the other hand, construction of units in multifamily buildings with five or more units soared 76.3% to a 513,000 annual rate.

Building permits, an indicator for future construction, moved in the opposite direction. Total permits fell to a 1.367 million annual rate in June, down 3% from May’s revised 1.410 million and 2.3% below the 1.399 million pace recorded in June 2025.

Meanwhile, single-family authorizations declined to an annual rate of 871,000, 2.4% below May’s revised 892,000, and permits for units in buildings with five or more units came in at a 445,000 annual rate.

Additionally, privately owned housing completions reached a seasonally adjusted annual rate of 1.39 million units in June, 3.3% above May’s revised 1.35 million figure and 1.5% higher than the June 2025 rate of 1.37 million. 

Single-family completions increased to a 964,000-unit annual pace, up 6.6% from May’s revised 904,000, and completions for units in buildings with five or more units were at a 413,000 annual rate.

Still, the newly released Census data comes as homebuilder confidence remains negative overall. While federal lawmakers hope that the newly passed 21st Century ROAD to Housing Act will increase housing supply, many homebuilders are working through excess inventory and need to employ generous incentives and price discounts to sell inventory, which has hurt margins. 

Until demand improves enough that builders no longer need to use elevated, margin-compressing incentives and discounts to move inventory, the building boom federal lawmakers are hoping for may not materialize. 

“The broader takeaway is that June’s rebound in housing starts does little to change the outlook for single-family construction. Builders are still completing homes already underway, but elevated new-home inventory, softer demand and persistent affordability challenges suggest they will remain cautious about adding new projects over the second half of the year,” Kushi said.