Housing starts fell sharply in May, driven by a steep drop in multifamily construction. Meanwhile, single-family buildings also slipped amid high interest rates, rising construction costs and ongoing 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 (HUD) and the U.S. Census Bureau. This pace reflects the number of housing units builders would begin over the next 12 months if May’s activity was sustained.
Within the total, single-family starts decreased 1.9% to an 882,000 seasonally adjusted annual rate and were down 6.7% compared to May 2025. On a year-to-date basis, single-family starts are down 6.3%. The three-month moving average fell to 933,000 units. Multifamily starts, which include apartment buildings and condominiums, dropped 40.2% from April to May to a 295,000-unit annualized pace and were down 14.2% compared to May 2025.
Regionally, on a year-to-date basis, combined single-family and multifamily starts were 17.5% higher in the Northeast, 4.1% lower in the Midwest, 1.6% lower in the South, and 4.9% lower in the West. For single-family starts, the Midwest has shown resilience, with starts holding steady on a year-to-date basis, while the Northeast, South, and West continue to post declines.
Overall permits decreased 0.7% to a 1.41-million-unit annualized rate in May. Single-family permits increased 0.6% to an 886,000-unit rate but remained 1.8% below their May 2025 level. Multifamily permits decreased 2.8% to a 527,000-unit annualized pace but were up 2.5% compared to May 2025.
Looking at regional permit data on a year-to-date basis, permits were 10% higher in the Northeast, 2.4% higher in the Midwest, 6.7% lower in the South, and 0.1% higher in the West.
The total number of housing units under construction stood at 1.27 million in May, down 7.1% from a year earlier. Single-family homes under construction totaled 587,000, a 5.9% year-over-year decline. Multifamily units under construction fell to 679,000, down 8.1% from a year ago and well below the peak of more than 1 million units reached in December 2023.
Housing completions also continued to soften. Single-family completions fell to an annual rate of 872,000 units, down 16.8% from a year earlier. Multifamily completions for buildings with five or more units declined 8.4% year over year to a 426,000-unit pace.