New home construction in the U.S. saw a boost in June, but the single-family housing market is struggling under the weight of high interest rates.
Total housing starts jumped 3 percent to a 1.35 million annualized rate last month, thanks to a whopping 19.6 percent increase in multifamily construction, according to government data released Wednesday. However, starts of single-family homes plummeted to an eight-month low, marking the fourth consecutive monthly decline.
This was above expectations. In addition, the starts from the two prior months were revised up.
Building permits, a key indicator of future construction activity, rose 3.4 percent to a 1.45 million annual rate, fueled by a surge in applications for multifamily projects. Meanwhile, authorizations for single-family homes dropped 2.3 percent to the slowest pace in over a year.
The robust single-family construction boom seen at the end of last year is fading fast. The report also revealed that the number of homes under construction fell to the lowest level since early 2022, indicating that builders are now focusing on keeping inventory more in line with current demand.
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