U.S. Housing Starts Tick Higher in June, But Permits and Completions Signal Construction Slowdown

Building Permits Slip Despite Broader Permit Uptick

Privately-owned housing units authorized by building permits in June posted a modest increase of 0.2% to a seasonally adjusted annual rate of 1.397 million, slightly above May’s revised figure of 1.394 million. However, year-over-year, permits declined by 4.4%, pointing to underlying softness in demand. Notably, single-family permits fell by 3.7% month-over-month to 866,000, while multi-family authorizations held at 478,000.

The decline in single-family permits — a key leading indicator for construction activity — may reflect persistent headwinds from high mortgage rates and softening buyer confidence. Traders watching homebuilders or construction material suppliers should monitor permit trends closely, as they signal future supply-side momentum.

Housing Starts Climb, but Single-Family Slows

June housing starts rose 4.6% month-over-month to 1.321 million units, slightly reversing May’s decline. However, on a year-over-year basis, starts edged 0.5% lower. The modest rebound came almost entirely from multifamily construction, as single-family starts dropped 4.6% to 883,000 — the lowest since early spring.

Multifamily starts, which reached an annual rate of 414,000, remain elevated but continue to trend lower from last year’s highs. The uneven recovery in housing starts, especially in the single-family segment, may weigh on demand for materials like lumber, steel, and construction services.

Completions Fall Sharply, Suggesting Bottlenecks

Housing completions plunged 14.7% from May to a seasonally adjusted annual rate of 1.314 million units — a steep 24.1% decline from the prior year. Single-family completions dropped 12.5% to 908,000, while multifamily completions fell to 383,000.

The slowdown in completions suggests possible labor shortages or supply chain bottlenecks still affecting the construction pipeline. With fewer homes reaching market, homebuilders may face further delays in realizing revenues, and inventory shortages could persist in key regional markets.

Market Outlook: Bearish Bias on Housing Sector Momentum

Despite a minor increase in overall starts, the continued decline in single-family permits and completions points to a bearish outlook for the residential construction sector. Unless mortgage rates ease or credit conditions improve, the sector may remain under pressure. Traders should expect headwinds for homebuilder stocks and construction-linked sectors in the near term.

More Information in our Economic Calendar.