By National Association of Home Builders
Housing starts fell sharply in May, driven by a steep drop in multifamily construction, while single-family building also slipped amid high interest rates, rising construction costs and persistent labor shortages.
Overall housing starts decreased 15.4% in May to a seasonally adjusted annual rate of 1.18 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 1.18 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 decreased 1.9% to an 882,000 seasonally adjusted annual rate and are down 6.7% compared to May 2025. The multifamily sector, which includes apartment buildings and condos, decreased 40.2% to an annualized 295,000 pace and are down 14.2% compared to May 2025.
“The decline in housing starts aligns with NAHB’s latest builder survey, which showed builder sentiment weakening further in June,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio. “Elevated mortgage rates, affordability challenges and cautious buyers continue to weigh on demand for new homes. Builders are offering incentives and cutting prices, but difficult market conditions are still limiting sustained momentum for new construction.”
