A surge in apartment construction masked continued weakness in the single-family sector
US housing starts surged 19% in June to a seasonally adjusted annual rate of 1,427,000, the strongest reading since March. The latest figure reversed a sharp pullback after US housing starts sank to a six-year low in May. The headline rebound, however, masked a more troubling picture for the single-family market.
Apartments drive the recovery
According to data released July 17 by the US Census Bureau and the Department of Housing and Urban Development, the June surge was driven almost entirely by multifamily construction.
Starts for buildings with five or more units climbed to an annualized rate of 513,000, up more than 76% from May's depressed level, following a near-40% plunge the prior month.
Multifamily figures are notoriously volatile month to month, and the June swing reflects that pattern.
Single-family starts, which account for the bulk of homebuilding, edged down 0.2% to an annualized 895,000 units and are now 3.2% below their June 2025 level, per the Census Bureau.
Building permits offered little reassurance for the months ahead. Total authorizations fell 3.0% in June to 1,367,000, a rate 2.3% below June 2025's 1,399,000.
Permits for single-family homes dropped 2.4% to 871,000, a leading indicator of future construction activity and one that matters directly to brokers whose purchase pipelines depend on new supply.
Pending home sales also posted their steepest decline of 2026 in June, signaling that demand-side pressure is compounding the supply-side caution.
Rates and unsold inventory keep builders cautious
The 30-year fixed-rate mortgage averaged 6.55% for the week ending July 16 up from 6.49% the prior week, according to Freddie Mac's Primary Mortgage Market Survey (PMMS).
Odeta Kushi of First American says demographic demand and life events continue to support the housing market, even as higher mortgage rates and a slower labor market influence buyer confidence.https://t.co/x2Vh3pc5If
— Mortgage Professional America Magazine (@MPAMagazineUS) July 16, 2026
The rate has risen roughly 60 basis points since the US and Israel struck Iran in late February, reaching an 11-month high. That environment has forced builders to lean heavily on sales incentives to move a stock of unsold new homes hovering near levels last seen in late 2007.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index fell two points to 34 in July, the 15th consecutive month below 40, the longest such run since 2012 — with 37% of builders reporting price cuts, up from 35% in June, per NAHB.
"Many potential buyers remain on the sidelines as they wait for lower mortgage rates, more certainty on inflation and a clearer economic outlook," said NAHB Chairman Bill Owens.
Meanwhile, housing completions rose 3.3% in June to 1,392,000, with single-family completions up 6.6% to 964,000, adding near-term supply even as the forward pipeline weakens. The Mortgage Bankers Association (MBA) projects the 30-year fixed rate will remain in the 6.1%–6.3% range through year-end 2026.
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