For the first time since June 2020, both single-family starts and permits fell below a 1 million annual pace, the National Association of Home Builders reports.
According to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts fell 2% to a seasonally adjusted annual rate of 1.56 million units in June – the lowest since June 2020. In contrast, the multifamily sector, which includes apartment buildings and condos, increased 10.3% to an annualized 577,000 pace.
“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. Price growth will slow significantly this year, but a housing deficit relative to demographic need will persist through this ongoing cyclical downturn,” said NAHB Chief Economist Robert Dietz.
Overall permits decreased 0.6% to a 1.69 million unit annualized rate in June. On a regional and year-to-year 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.