By Nathalie Voit
New housing starts in June dipped to their lowest level since June 2020, the Commerce Department reported on July 19.
According to Tuesday’s release, privately-owned housing starts declined 2.0% last month to a seasonally adjusted annual rate of 1.56 million.
New residential construction tumbled as the number of single-family housing starts fell by 8.1% on the month to an annualized 982,000 pace. The National Association of Home Builders (NAHB) said this was the lowest rate for single-family starts since June 2020.
Construction on multifamily homes settled to a 568,000 seasonally adjusted annual rate.
Compared to one year ago, the department said new home construction is down 6.3% from last June’s rate of 1.66 million.
Building permits for future housing projects also slipped by 0.6% over the month to a seasonally adjusted annual pace of 1.69 million.
Housing completions, or the number of new homes ready for occupation, decreased to 1.37 million. According to the release, this is 4.6% below the May metric of 1.43 million.
The sharp downturn in the number of new homes being built across the country is a testament to the recent slowdown in the housing market.
“Single-family starts are retreating on higher construction costs and interest rates, and this decline is reflected in our latest builder surveys, which show a steep drop in builder sentiment for the single-family market,” NAHB Chairman Jerry Konter said in a press release. “Builders are reporting weakening traffic as housing affordability declines.”
“While the multifamily market remains strong on solid rental housing demand, the softening of single-family construction data should send a strong signal to the Federal Reserve that tighter financial conditions are producing a housing downturn,” NAHB Chief Economist Robert Dietz added in the release.
“Price growth will slow significantly this year, but a housing deficit relative to demographic need will persist through this ongoing cyclical downturn,” he warned.
