May Housing Starts Fall to Lowest Since 2020 Amid Multi-Family Weakness

01:30 PM EDT, 06/16/2026 (MT Newswires) -- US housing starts plummeted to the lowest level since 2020 in May amid a steep drop in multi-family projects, government data showed Tuesday.

Starts slid 15% sequentially to a seasonally adjusted annual rate of 1.18 million units last month, according to the Census Bureau and the Department of Housing and Urban Development. The consensus was for a 2% drop to 1.43 million in a survey compiled by Bloomberg.

April housing starts were revised down to 1.39 million units from 1.47 million.

"(May's print) marked the lowest level since May 2020," TD Economics Economist Admir Kolaj said in a note on Tuesday. "While single family starts continued to edge lower, it was the unusually sharp drop in the volatile multifamily segment that sank the headline measure."

Starts on buildings with at least five units tumbled 42% month on month to 284,000 units in May, according to government data. The single-unit component decreased 1.9% to 882,000 units.

Consolidated starts plunged 27% in the Northeast, while the West and South declined 17% each. Starts increased 3.7% in the Midwest.

Building permits -- which is a forward-looking indicator of homebuilding -- decreased 0.7% to 1.41 million units last month, while Wall Street expected 1.42 million. Authorizations of buildings with five or more units declined 3.5%, while those with single units edged 0.6% higher, official data showed.

"There is little indication that US home building will break to the upside anytime soon, given high mortgage rates, previous overbuilding in the South, elevated new home inventories relative to sales, and the current depressed level of builder activity in the NAHB survey," BMO Capital Markets Senior Economist Sal Guatieri said in a note.

US homebuilder confidence declined in June as rising material costs and high mortgage rates stoked affordability concerns, the National Association of Home Builders and Wells Fargo said Monday.

"With the rate environment unlikely to materially change anytime soon, affordability pressures will persist through the rest of the year," TD's Kolaj said. "As such, any improvement in homebuilding activity over the rest of the year, is likely to be only gradual."

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