U.S. home construction starts rose sharply in June after a sharp decline a month earlier, driven by a rebound in apartment construction.
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New home construction rose 19% last month to an annual figure of 1.43 million, the highest since March, government data released on Friday showed. That exceeded all estimates in a Bloomberg survey of economists.
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Multifamily starts rose more than 76% to an annual rate of 532,000, after a nearly 40% decline a month earlier. However, single-family home starts fell 0.2%, falling again after a generally slow spring season for builders.
The recovery in multifamily construction underlines the volatile nature of monthly housing numbers, especially among apartments. Still, high prices and mortgage rates – factors that have depressed demand for single-family homes – could also support demand for apartments.
Single-family homebuilders, meanwhile, have generally faced high inventory and weak demand. That has forced many to use sales incentives to attract buyers.
Looking ahead to future construction, overall building permits fell 3%, to the lowest level since March. Permits for single-family homes fell to a 10-month low, and applications for multi-family homes also fell.
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The recently passed 21st Century Road to Housing Act could help builders in the long run, especially developers of build-to-rent communities and makers of factory-built homes, Bloomberg Intelligence analyst Drew Reading said in a note this week. However, this is not expected to improve much in the short term, he said.
Prior to the report, the Federal Reserve Bank of Atlanta announced GDPNow
The number of housing projects in the US increased. In the South, the nation’s largest homebuilding region, they rose 15.2%, driven by multifamily construction. Construction output in the Midwest reached its highest level since 2024.
New home construction data is volatile and the government report shows 90% are confident the monthly change ranges from a 3.1% gain to a 34.9% jump.