In May, housing starts experienced a significant decline, which was primarily due to a substantial decrease in multifamily construction.
In the interim, single-family buildings also experienced a decline due to the ongoing labor shortages, rising construction costs, and high interest rates.
According to a report from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau, the seasonally adjusted annual rate of housing starts decreased by 15.4% in May to 1.18 million units.
This tempo is indicative of the number of housing units that builders would construct over the next 12 months if May’s activity were to continue.
The seasonally adjusted annual rate of single-family starts decreased by 1.9% to 882,000 in the total, which is a 6.7% decrease from May 2025.
Single-family starts have decreased by 6.3% year-to-date. The three-month moving average decreased to 933,000 units.
The annualized pace of multifamily starts, which encompasses condominiums and apartment structures, decreased by 40.2% from April to May to a total of 295,000 units.
Comparatively, they were down 14.2% from May 2025.
On a year-to-date basis, the Northeast experienced a 17.5% increase in combined single-family and multifamily starts, while the Midwest experienced a 4.1% decrease, the South experienced a 1.6% decrease, and the West experienced a 4.9% decrease.
The Midwest has demonstrated resilience in the context of single-family starts, as they have maintained their year-to-date stability.
Conversely, the Northeast, South, and West continue to experience declines.
In May, the annualized rate of permits decreased by 0.7% to 1.41 million units.
The rate of single-family permits increased by 0.6% to 886,000 units, but it remained 1.8% below the level reached in May 2025.
The annualized pace of multifamily permits decreased by 2.8% to 527,000 units, but they were up by 2.5% in comparison to May 2025.
Permits were 10% higher in the Northeast, 2.4% higher in the Midwest, 6.7% lower in the South, and 0.1% higher in the West when examining regional permit data on a year-to-date basis.
In May, the total number of housing units under construction was 1.27 million, a 7.1% decrease from the previous year.
The total number of single-family residences under construction was 587,000, which represents a 5.9% decrease from the previous year.
The number of multifamily units under construction has decreased to 679,000, an 8.1% decrease from the previous year and a significant distance from the apex of over 1 million units in December 2023.
The pace of housing completions also continued to decline.
The annual rate of single-family completions decreased by 16.8% from the previous year, to 872,000 units.
The tempo of multifamily completions for buildings with five or more units decreased by 8.4% year over year, resulting in a 426,000-unit pace.
[Read more about this topic on Eyeonhousing.org]