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Multifamily Gains Lift Overall Starts Despite Single-Family Decline – Eye On Housing

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Strong multifamily growth pushed overall housing starts higher in June, while single-family production remained sluggish as elevated mortgage rates, rising construction costs and persistent labor shortages continued to weigh on the market.

Overall housing starts increased 19.0% in June to a seasonally adjusted annual rate of 1.43 million units, according to a report from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau. This pace reflects the number of housing units builders would begin over the next 12 months if June’s activity were sustained.

Within the total, single-family starts decreased 0.2% to an 895,000 seasonally adjusted annual rate and were down 3.2% compared to June 2025. On a year-to-date basis, single-family starts are down 5.3%. Given recent volatility, the three-month moving average provides a clearer signal, falling to 902,000 units.

Multifamily starts, which include apartment buildings and condominiums, rose 76.2% from May to June to an annualized 532,000 pace. The three-month moving average for multifamily construction has trended higher to 445,000 units, and activity is 17.2% higher compared to year-earlier levels.

Regionally, on a year-to-date basis, combined single-family and multifamily starts were 4.5% higher in the Northeast, 1.7% higher in the South, 1.2% higher in the Midwest, and 4.4% lower in the West. Single-family starts were down in all four regions.

The total number of housing units under construction stood at 1.26 million in June, down 6.2% from a year earlier. Single-family homes under construction stood at 582,000 units, a 6.9% year-over-year decline. Multifamily units under construction slowed down to 682,000, down from peaks above 1 million units in December 2023 and 5.7% lower than a year ago.

Completions of single-family homes have improved to an annual rate of about 964,000 units. This marks a 5.5% increase from a year earlier. However, multifamily completions for buildings with five or more units were down 5.1% year over year to a 413,000-unit pace. On a year-to-date basis, total completions across both sectors are down 9.5% reflecting ongoing challenges in the residential construction sector.

Overall permits declined 3.0% to a 1.37-million-unit annualized rate in June. Single-family permits decreased 2.4% to an 871,000-unit rate and are essentially flat compared to June 2025. Multifamily permits are down 4.2% to an annualized 496,000 pace and are down 5.7% compared to June 2025. Looking at regional permit data on a year-to-date basis, total permits were 15.2% higher in the Northeast, 1.4% higher in the Midwest, 0.7% higher in the West, but 6.3% lower in the South. For single-family permits, the Midwest was the only region to post an increase, rising 1.3% reflecting the residential construction strength in the region.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Builder Sentiment Stays Weak as Affordability Concerns Persist – Eye On Housing

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Economic uncertainty and persistent affordability challenges driven by rising material prices, high land costs, and elevated mortgage rates continue to weigh on builder sentiment.

Builder confidence in the market for newly built single-family homes fell two points to 34 in July, down from an upwardly revised reading of 36 in June, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Sentiment has remained below 40 for 15 consecutive months, the longest such stretch since 2012.

With the HMI below 40 for 15 straight months, affordability remains the home building industry’s primary challenge, as elevated mortgage rates, costly land, rising material prices, and persistent skilled labor shortages continue to affect the market. Looking ahead, the newly enacted 21st Century ROAD to Housing Act is a positive step that will help expand housing supply and lower overall housing costs, although more policy change is needed at the state and local level.

The latest HMI survey also revealed that 37% of builders cut prices in July, up from 35% in June and 32% in May. The average price reduction was 6% in July, the same rate as the previous month. The use of sales incentives was 63% in July, up slightly from 62% in June, and marking the 16th consecutive month this share has reached 60% or higher.

Derived from a monthly survey that NAHB has been conducting for more than 40 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All of the HMI sub-indices posted declines in July. The HMI index gauging current sales conditions fell one point to 37, the index measuring future sales dropped two points to 43 and the index charting traffic of prospective buyers posted a two-point decline to 23.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 45, the Midwest increased two points to 45, the South fell one point to 33 and the West dropped one point to 26. The HMI tables can be found at nahb.org/hmi.



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Building Material Prices Continue to Rise Despite Energy Price Declines – Eye On Housing

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Residential building material prices, excluding energy, rose 0.5% in June and were up 4.6% from a year ago. Lower energy prices were apparent in June, as energy input prices fell 10.3% over the month. Meanwhile, prices for services rose 5.2% over the year, and were up 1.0% from the previous month.

The Producer Price Index for final demand declined 0.3% in June, after rising 0.6% in May. Compared to a year ago, final demand prices were up 5.5%. The index for final demand services rose 0.3% in June, while the index for final demand goods fell 1.4% over the month.

The price index for inputs to new residential construction fell 0.1% in June and was up 6.2% from last year. The price of goods used in new residential construction (including energy) was down 0.8% over the month and up 6.9% from last year, while the price of services was up 1.0% over the month and up 5.2% from last year. The decline in the overall residential input price index was largely driven by lower goods prices, particularly energy-related inputs.

Input Goods

The goods component has a larger importance to the inputs to residential construction price index, representing around 60% of the total. On a monthly basis, the price of input goods to new residential construction was down 0.8% in June, the first monthly decline since December of last year.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index. Energy input prices fell 10.3% in June but were 40.9% higher than a year ago. Building material prices were up 0.5% in June and up 4.6% compared to one year ago.

Among input goods, energy costs continue to show the largest price increase from a year ago. Diesel fuel costs were up 65.7% from a year ago in June. Outside of energy products, roofing asphalt product prices were up 9.2% from a year ago and rose 4.0% in June alone. Softwood lumber prices showed upward movement in June, with prices 7.0% higher than a year ago. Ready-mix concrete prices were up 1.9% from a year ago, while gypsum building material prices were down 1.1% from a year ago.

Input Services

Prices for service inputs to residential construction rose 1.0% in June. On a year-over-year basis, service input prices were up 5.2%. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).

The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 4.7% from a year ago. The price of transportation and warehousing services rose 16.0%, while prices for other services were up 2.0% over the year.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Single-Family Permitting Continued to Weaken Through May – Eye On Housing

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State-level permitting activity continued to reflect a divided housing market through the first five months of 2026. Elevated mortgage rates and ongoing affordability challenges continued to weigh on single-family construction across much of the country, while multifamily permitting remained comparatively stronger, supported by gains in several regions despite continued weakness in parts of the South.

Over the first five months of the year, the number of single-family permits issued nationwide reached 380,130. Compared with the same period in 2025, this represents a 6.1 percent decline compared with the May 2025 total of 404,977. In contrast, multifamily permitting activity remained stronger, with 208,192 permits issued nationwide, marking a 6.5 percent increase from the same period last year.

Regionally, year-to-date single-family permitting declined in all four regions through May. The Midwest was essentially flat, while the South declined 5.3 percent, the West fell 9.4 percent, and the Northeast posted the largest decline, down 12.2 percent. Multifamily permits increased in three of the four regions, led by the Northeast (up 32.9 percent), followed by the West (up 18.3 percent) and the Midwest (up 5.0 percent). The South was the only region to post a decline, with multifamily permits falling 5.7 percent, driven largely by reduced permitting activity in major metropolitan areas across the region.

At the state level, ten states and the District of Columbia recorded year-over-year increases in single-family permits through May, with gains ranging from 54.5 percent in the District of Columbia to 0.2 percent in Connecticut. The remaining 39 states posted declines, led by Nevada, which recorded the steepest drop at 28.5 percent. Kentucky reported no change.

The ten states issuing the highest number of single-family permits accounted for 62.8 percent of all single-family permits issued nationwide. Texas led the nation with 61,157 permits issued through May 2026, although this represented a 7.4 percent decline from the same period in 2025. Florida, the second-highest state, recorded a 5.5 percent decline, while North Carolina, ranking third, posted a 9.5 percent decrease.

Between May 2026 and May 2025, 33 states and the District of Columbia recorded increases in multifamily building permits, while 17 states experienced declines. Rhode Island posted the largest percentage increase, with multifamily permits rising 158.6 percent, from 251 to 649 units. In contrast, Nevada recorded the steepest decline, with permits falling 77.6 percent, from 3,702 to 828 units.

The ten states issuing the highest number of multifamily permits accounted for 62.6 percent of all multifamily permits issued nationwide. Through the first five months of 2026, California, which issued the largest number of multifamily permits, posted a 47.9 percent increase compared with the same period last year. Texas, the second-highest state, recorded a 23.3 percent decline, while Florida, ranking third, saw multifamily permits decrease by 37.4 percent.

At the local level, the following are the ten metropolitan areas with the highest number of single-family permits issued.

Below are the ten metropolitan areas with the highest levels of multifamily permitting activity. It is worth noting that the largest multifamily markets continue to show declines. Gains for multifamily permitting are occurring in smaller markets and for smaller builders.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Inflation Cooled in June as Gas Prices Eased – Eye On Housing

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Inflation slowed to 3.5% in June from a three-year high last month, driven by a mid-June ceasefire agreement that stabilized oil markets and lowered energy prices. The decline in energy prices offset increases in shelter and food, resulting in a monthly decrease in inflation for the first time since April 2020. However, the relief could be short-lived as the ceasefire collapsed in early July has pushed oil prices up by 12% and renewed inflation concerns. 

On a non-seasonally adjusted basis, the Consumer Price Index (CPI) rose by 3.5% in June from a year ago, following a 4.2% increase last month, according to the BLS latest report. The “core” CPI, excluding the volatile food and energy components, increased by 2.6% over the past twelve months, following a 2.9% increase in May. The housing shelter index, which makes up a large portion of “core” CPI, rose 3.3% over the year, following a 3.4% increase last month. Meanwhile, the component index for food rose by 3.0%, and the energy component index increased by 15.7%.

On a monthly basis, the CPI fell by 0.4% in June (seasonally adjusted), while the “core” CPI remained unchanged.

The price index for a broad set of energy sources decreased by 5.7% in June, with decreases in gasoline (-9.7%), fuel oil (-9.2%), and electricity (-1.0%), with a minor increase in natural gas (+0.5%). Meanwhile, both food at home and food away from home indexes rose by 0.2 in June.

Outside of energy, other top contributors that fell in June included indexes for motor vehicle insurance (-2.0%), communication (-1.5%), apparel (-0.6%), medical care (-0.1%) and used cars and trucks (-0.2%). Meanwhile, the index for recreation (+0.5%), household furnishings and operations (+0.2%), and personal care (+0.2%) were among the few major indexes that increased over the month.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.1% in June, the smallest monthly increase since January 2021. The index for owners’ equivalent rent (OER) rose by 0.2%, while the index for rent of primary residence (RPR) increased by 0.1% over the month.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than core inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster than core inflation, the real rent index rises and vice versa. The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). In June, the Real Rent Index rose by 0.1%.



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Two or More Story Home Starts Pull Back in 2025 – Eye On Housing

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Over half of new single-family homes built in 2025 were two or more stories, according to the recent release of the Census Bureau’s Survey of Construction (SOC). After increasing in 2024, the share of homes started with two or more stories fell in 2025. However, the gap between one-story and two-or-more-story shares has been relatively stable since 2021, with only small year-to-year fluctuations.

Nationwide, the share of new homes with two or more stories fell from 52.5% in 2024 to 51.4% in 2025, while the share of new homes with one story rose from 47.5% to 48.6%. Despite the decline, more than half of new homes built nationally in 2025 were two or more stories, though this share varied significantly across the nation.

As shown below, new homes started in the Midwest and the South generally favored single-story homes, while the Northeast and the West had higher shares of two or more stories. In the Midwest, single-story homes accounted for 55.7% of new homes started in the East North Central division and 54.3% in the West North Central division. In the South, single-story shares reached 61.7% in East South Central and 56.6% in West South Central. The South Atlantic division was the exception, with two or more story homes still the majority (54.2%).

Outside the Midwest and the South, single-story shares were lowest in New England (25.7%) and the Middle Atlantic (26.5%), while the Pacific (47.5%) and Mountain (41.9%) divisions were higher.  

Compared with 2024, single-story shares rose in the East North Central and East South Central divisions to multi-year highs, while shares in the West North Central and West South Central divisions fell to multi-year lows.

In the Northeast, where two-or-more-story homes are more common, New England rebounded and the Middle Atlantic declined further. Two divisions in the West have moved in opposite directions over the past few years. The single-story share in the Pacific has increased in seven of the last eight years, from 32.7% in 2017 to 47.5% in 2025. However, the Mountain division saw the reverse, falling from a peak of 50.7% in 2020 to 41.9% in 2025.

Looking specifically at new homes with three or more stories, the national share edged up to 5.2%, compared to 5.0% in 2017. The small increase over the past eight years has been concentrated in New England (from 7.2% to 14.1%) and the Middle Atlantic (from 14.0% to 15.1%), while the share has doubled in Mountain division (from 3.0% to 6.6%). New homes with three or more stories were less common in the Midwest and South, accounting for less than 3% of new homes started in most divisions, except the South Atlantic at 5.0%.



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2025 New Single-Family Starts by Census Division – Eye On Housing

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Persistently high mortgage rates, elevated costs for builders, and ongoing supply-side constraints continued to weigh on single-family construction in 2025. According to the NAHB analysis of the 2025 Survey of Construction (SOC), a total of 939,182 new single-family units started construction nationwide. This represents a 6.9% decline compared to 2024.

Among the nine Census divisions, the South Atlantic division continued to lead the nation with 308,189 starts in 2025, representing about one-third of all new single-family starts. The second highest was the West South Central division at 171,247 starts, followed by the Mountain division with 106,549 starts and the Pacific division with 95,940 starts. Collectively, the South Atlantic, West South Central, and Mountain divisions accounted for roughly 62% of total new single-family housing starts in 2025.

The East North Central division recorded 87,589 new single-family starts in 2025, followed by the East South Central division with 62,674 starts and the West North Central division with 44,996 starts. The Middle Atlantic division posted 42,328 starts, while New England remained the smallest division by volume, with 19,670 new single-family starts.

Regional performance varied considerably in 2025. Only three of the nine Census divisions posted year-over-year growth in single-family starts. The East South Central division recorded the strongest annual gain, rising 13.7%, followed by the East North Central division at 8.0% and the Middle Atlantic division at 4.0%.

In contrast, the remaining six divisions experienced declines. New England recorded the steepest drop, with starts falling 26.3% from the previous year. The Mountain and South Atlantic divisions, both of which posted gains in 2024, reversed course in 2025, declining 15.4% and 10.5%, respectively. Single-family starts also decreased 8.8% in the West South Central division, 7.5% in the West North Central division, and 3.3% in the Pacific division.

Overall, the 2025 SOC data points to a more uneven regional housing market than in 2024. While parts of the Midwest and the Middle Atlantic region continued to expand, declines in the nation’s largest home building regions, particularly the South Atlantic, Mountain, and West South Central divisions, more than offset those gains, driving the national decline in single-family housing starts.



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Existing Home Sales Slowed in June – Eye On Housing

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After reaching a five-month high last month, existing home sales pulled back in June as record-high home prices and elevated mortgage rates weighed on buyers. This monthly volatility reflects the sensitivity of home buyer demand to mortgage rate changes. Mortgage rates, though lower than a year ago, have increased more than 50 basis points since the Iran war began in late February and remain stuck around 6.5% in recent weeks. Energy shock has reaccelerated inflation, which has outpaced wage growth, further weighing on housing affordability.

Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 2.4% to a seasonally adjusted annual rate of 4.09 million in June, according to the National Association of Realtors (NAR). On a year-over-year basis, sales were 2.8% higher from a year ago.

The existing home inventory level was 1.56 million units in June, down 0.6% from May but up 1.3% from a year ago. At the current sales rate, June unsold inventory sits at a 4.6-months’ supply, up from 4.5-months in May and unchanged from a year ago. Inventory between 4.5 to 6 months’ supply is generally considered a balanced market.

Homes stayed on the market for a median of 28 days in June, down from 29 days in the previous month but up from 27 days in June 2025.

The first-time buyer share was 33% in June. The share was down from 35% in May but up from 30% a year ago.

The June all-cash sales share was 25% of transactions, unchanged from last month but down from 29% in June 2025. All-cash buyers are less affected by changes in interest rates.

The June median sales price of all existing homes was $440,600, up 1.8% from last year. This marks the 36th consecutive month of year-over-year increases and reaches an all-time high. The median condominium/co-op price in June was up 1.6% from a year ago at $380,000. Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2026.

Existing home sales in June were mixed across the four major regions. Sales fell in the South (-3.6%), Midwest (-3.0%) and West (-1.3%) but rose in the Northeast (+2.1%). On a year-over-year basis, sales increased in the South (+3.8%), West (+2.8%) and Midwest (+2.1%) but remained unchanged in Northeast.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 74.0 to 76.8 in May, the highest level since November 2025. On a year-over-year basis, pending sales were 4.8% higher than a year ago, according to the National Association of Realtors’ data.



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Remodeling Market Sentiment Remains in Positive Territory in Second Quarter – Eye On Housing

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In the second quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 61, down one point compared to the previous quarter. The RMI has remained in the low 60s consistently over the past year.

Even with this slight decline from the previous quarter, remodeler sentiment remains the standout sector within the housing industry, outperforming both its single-family and multifamily counterparts.  

With current mortgage rates above the median outstanding rate for existing homeowners, the incentive to remodel instead of purchasing a new home given the low levels of existing inventory persists due to this lock-in effect. Additionally, homeowners are sitting on record high real estate asset gains which they are able to tap into making it easier to fund remodeling projects. However, ongoing economic uncertainty and current cost pressures due to inflation are causing project delays, especially for larger ones. In the latest RMI survey, 74% of remodelers reported that their suppliers have increased prices of materials since March due to higher fuel costs, with the average increase in materials prices over that span being 6.7%. 

Nevertheless, based on the positive sentiment from the RMI and structural demand tailwinds, NAHB’s forecast for remodeling spending remains robust both in the short-term and over the long run.

The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.” Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.

Current Conditions

The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index. 

The Current Conditions Index is an average of three components: the current market for large remodeling projects ($50,000 or more), moderately-sized projects ($20,000 to $49,999), and small projects (under $20,000).

In the second quarter of 2026, the Current Conditions Index averaged 70, unchanged from the previous quarter. The component measuring moderately-sized remodeling projects increased four points to 73, while the small projects component remained unchanged at 74 and the large projects component decreased three points to 64. 

Future Indicators

The Future Indicators Index is an average of two components: the current rate at which leads and inquiries are coming in, and the current backlog of remodeling projects.

In the second quarter of 2026, the Future Indicators Index averaged 52, down two points from the previous quarter. Both components decreased quarter-over-quarter but still remain above the break-even point of 50. The component measuring backlog of remodeling jobs was down two points to 54, while the component measuring the current rate at which leads and inquiries are coming in edged down one point to 51.

For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.



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Mortgage Activity Flat in June, ARM Share Decreases – Eye On Housing

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Mortgage applications stalled in June as higher mortgage rates dampened market activity. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, stayed relatively unchanged with a marginal decrease of 0.3% month-over-month on a seasonally adjusted basis. The decline was driven by a 2.5% decline in refinancing applications, which offset a modest 0.7% gain in purchase applications. Compared with a year earlier, however, total mortgage application activity remained 7.9% higher, with refinance applications up 15.6% and purchase applications rising 3.1%. Meanwhile, applications for adjustable-rate mortgages (ARM) decreased 9.4% over the month, bringing the ARM share of total applications to 8.2%.

The average contract rate for a 30-year fixed-rate mortgage increased 5 basis points (bps) to 6.59% in June, as markets priced in inflation risks and the possibility of the Federal Reserve increasing rates this year. Nonetheless, the rate remained 27 bps lower than its level a year ago.

By loan type, applications for ARMs decreased 9.4%, while fixed-rate mortgages (FRMs) increased about 0.4% from the previous month. On a year-over-year basis, applications for FRM and ARMs were up 6.9% and 22.4%, respectively. As of June 2026, the share of ARMs applications was down 0.8 percentage points from the prior month to 8.2% on a non-seasonally adjusted basis (NSA). Compared to a year ago, ARMs share were 0.6 percentage points higher. The average contract interest rate for 5/1 ARMs was 5.8% in June.

Loan sizes decreased across most categories in June, with ARM loans being the only exception. Consequently, the overall average loan size declined 3.4% to $393,800. The average purchase and refinance loan sizes decreased 1.8% to $456,500, and 5.8% to $302,500, respectively. The average ARM loan size edged up 0.8% to $944,800.



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