By NAHB
A sharp decline in multifamily production pushed overall housing starts down in May while single-family output was essentially flat due to economic and tariff uncertainty along with elevated interest rates.
Overall housing starts decreased 9.8% in May to a seasonally adjusted annual rate of 1.26 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The May reading of 1.26 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 0.4% to a 924,000 seasonally adjusted annual rate and are down 7.3% compared to May 2024. The multifamily sector, which includes apartment buildings and condos, decreased 29.7% to an annualized 332,000 pace.
On a year-to-date basis, single-family starts are down 7.1%. In contrast, multifamily 5-plus unit starts are up 14.5% as more prospective home buyers remain on the sidelines.
“Our latest builder survey shows that development and market conditions remain a major concern for builders, with consumer confidence lower and elevated interest rates for buyers and builders,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, N.C. “Almost 40% of home builders reduced sales prices in the last month in order to offset difficult housing affordability conditions.”
