A 29.7% month-over-month decline in multifamily production pushed overall housing starts down 9.8% in May to a seasonally adjusted annual rate of 1.26 million units, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. May’s annualized pace of 332,000 apartment units was the lowest in six months.
Although single-family starts fared better on a monthly basis, rising 0.4% from April, the year-to-date story is different. Single-family starts are down 7.1% YTD, while multifamily five-plus unit starts are up 14.5% as more prospective home buyers remain on the sidelines, according to the National Association of Home Builders. Multifamily also compared favorably to single-family in terms of construction permits issued during May.
“Single-family permits and construction starts are down on a year-to-date basis for 2025 for what has been a disappointing spring housing market, given ongoing elevated mortgage interest rates, challenging housing affordability conditions led by higher construction costs and macroeconomic uncertainty,” said NAHB chief economist Robert Dietz. “NAHB is forecasting that 2025 will end with a decline for single-family housing starts.”
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