In June, privately-owned housing starts were at an annual rate of 1,434,000 units, 8.0 percent below the revised May estimate of 1,559,000 units, and 8.1 percent lower than June 2022’s rate of 1,561,000 units. June’s single-family housing starts: 935,000 units (7.0% below revised May). Units in buildings with five or more units: 482,000.
In addition to the housing units authorized by building permits in June, there were some notable regional trends. The West region experienced the highest number of authorized housing units with 580,000, followed by the South region with 506,000, the Northeast with 209,000, and the Midwest with 145,000.
Furthermore, when comparing the types of housing units, it was observed that single-family authorizations accounted for approximately 64 percent of all authorized units, while units in buildings with five units or more made up the remaining 36 percent.
Overall, despite the slight decline in the total number of authorized housing units, the housing market continued to show resilience with a healthy demand for both single-family homes and multi-unit buildings in various regions across the country.
In June, housing starts were below expectations, with revisions showing weakness in April and May as well. Single-family starts have shown some improvement lately, despite a dip in June, mainly due to limited existing home inventory.
The anticipated decline in multi-family starts seems to have commenced, and we can expect more weakness in this sector due to decreasing asking rents, increasing vacancies, and stricter lending conditions. This trend is evident in both the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions and the Architectural Billings Index.
An unprecedented number of multi-family housing units are currently being constructed, primarily due to construction delays. However, the number of single-family housing units under construction is on the decline. This indicates that a substantial quantity of multi-family housing units will be completed later this year and in 2024.
