Washington, D.C.—Housing starts fell sharply in May as multifamily construction recorded a steep decline, according to the National Association of Home Builders (NAHB). Single-family construction also slipped amid high interest rates, rising construction costs and persistent labor shortages.
Overall housing starts decreased 15.4% in May to a seasonally adjusted annual rate of 1.18 million units. The U.S. Department of Housing and Urban Development and U.S. Census Bureau reported the data. The May reading represents the number of housing units builders would begin if construction continued at that pace for the next 12 months.
Single-family starts decreased 1.9% to a seasonally adjusted annual rate of 882,000 units. Starts were down 6.7% compared with May 2025. The multifamily sector includes apartment buildings and condominiums. Multifamily starts fell 40.2% to an annualized pace of 295,000 units. That marked a 14.2% decline compared with May 2025.
“The decline in housing starts aligns with NAHB’s latest builder survey, which showed builder sentiment weakening further in June,” said Bill Owens, chairman of the NAHB and a home builder and remodeler from Worthington, Ohio. “Elevated mortgage rates, affordability challenges and cautious buyers continue to weigh on demand for new homes. Builders are offering incentives and cutting prices, but difficult market conditions are still limiting sustained momentum for new construction.”
Jing Fu, NAHB’s senior director of forecasting and analysis, added, “Year-to-date declines in single-family housing starts and permits underscore the continued challenges in the housing market. While the Midwest has shown some resilience, lower permit activity indicates builders remain cautious about future construction amid economic uncertainty and affordability pressures.”
Regional stats
On a regional, year-to-date basis, combined single-family and multifamily starts increased 17.5% in the Northeast. Starts fell 4.1% in the Midwest, 1.6% in the South and 4.9% in the West.
Overall permits decreased 0.7% to an annualized rate of 1.41 million units in May. Single-family permits increased 0.6% to an 886,000-unit rate. They remained 1.8% below May 2025 levels. Multifamily permits decreased 2.8% to an annualized pace of 527,000 units. They were up 2.5% compared with May 2025.
On a regional, year-to-date basis, permits increased 10% in the Northeast and 2.4% in the Midwest. Permits fell 6.7% in the South and increased 0.1% in the West.
Builders had 587,000 single-family homes under construction in May. That total was 5.9% lower than a year earlier.