Housing starts in the US surged in June after a sharp drop a month earlier, driven by a rebound in apartment construction.
New residential construction increased 19% last month to an annualized rate of 1.43 million, the highest since March, government data released Friday showed. That topped all estimates in a Bloomberg survey of economists.
Builders increased multifamily starts by more than 76% to an annual rate of 532,000, following a nearly 40% plunge month earlier. Single-family starts, however, declined 0.2%, slipping again after a generally slow spring season for builders.
The rebound in multifamily construction underscores the volatile nature of monthly housing numbers, especially among apartments. Still, high prices and mortgage rates — factors that have been weighing on demand for single-family homes — could also be supporting apartment demand.
Single-family homebuilders, meanwhile, have generally been confronting elevated inventory and weak demand. That’s forced many to use to sales incentives to attract buyers.
Looking ahead to future construction, overall building permits decreased 3% to the lowest since March. Permits for one-family homes dropped to a 10-month low, and multifamily applications also declined.
The recently passed 21st Century Road to Housing Act could help builders in the long term, especially developers of build-to-rent communities and makers of factory-built housing, Bloomberg Intelligence analyst Drew Reading said in a note this week. However, it isn’t expected to improve things much in the near term, he said.
Prior to the report, the Federal Reserve Bank of Atlanta’s GDPNow forecast showed residential investment making only a marginal contribution to second-quarter gross domestic product.
Housing starts rose across the US. In the South, the nation’s biggest homebuilding region, they increased 15.2%, driven by multifamily construction. Building in the Midwest reached the highest since 2024.
The new residential construction data are volatile, and the government report showed 90% confidence that the monthly change ranged from a 3.1% gain to a 34.9% jump.
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