Single-family housing starts up in June, but not enough to meet demand

Single-family home construction was boosted last month, offering small relief to markets affected by an ongoing shortage of available homes for sale. But economists say the pace of construction still isn’t fast enough to meet buyer demand.

Last June saw an increase in single-family housing starts, which helped to offset a drop in multifamily production. However, total housing starts in June were still 0.9% lower than they were one year ago, at a seasonally adjusted rate of 1.25 million units, according to U.S. Commerce Department data published this week.

It means that total housing starts have decreased for the second successive month, at what is traditionally the busiest time of the year for house building.

Single-family starts increased by 3.5% in June to 847,000 units, but multifamily failed to keep pace, with starts falling 9.2% to just 406,000 units.

“The relatively flat housing starts data in June is due to a decline in multifamily production, which still remains somewhat elevated due to affordability concerns in the for-sale market,” said Robert Dietz, chief economist of the National Association of Home Builders. “The census data show that the only region showing single-family construction gains for the first half of 2019 is the South, where housing is generally more affordable relative to incomes.”

However, the South region saw combined single-family and multifamily project starts fall 9.2% in June. The West saw a 4.9% decline. Combined new home starts did increase in the Northeast and the Midwest regions however, by 31.% and 27.1% respectively.

Builders have reported several challenges in ramping up new-home production in markets nationwide, despite persistent calls from the real estate industry to do so. They say labor and lot shortages, and the rising costs of building materials have prevented them from increasing construction.

The challenges don’t appear to be easing either. Housing permits, a gauge for future housing production, fell to a two-year low in June. Permits nationwide dropped 6.1% last month to a 1.22 million unit annualized rate. Single-family permits last month did eke out a 0.4% increase to 813,000 units, while multifamily permits dropped 16.8% to a 407,000 pace.

Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at

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