Residential starts plunged 12.3 percent to 1.17 million in June, the lowest in nine months, according to a new Housing Starts report from the Census Bureau and the Department of Housing and Urban Development (HUD) released Wednesday.

Building permits fell 2.2 percent to 1.27 million while single-family home starts decreased by 9.1 percent and multi-family home starts dropped 19.8 percent. In total, 1.26 million new houses were completed in June, unchanged from last month but 2.2 percent above what it was in June 2017.

“It’s alarming that the single-family construction permit growth is decelerating at a time when homeownership is rising and millennials are reaching their peak age to really enter the market and buy their first home,” said Freddie Mac Chief Economist Sam Khater. “The growing imbalance between demand and supply is the reason home prices continue to escalate.”

Courtesy of Census Bureau and Department of Housing and Ubrna Development.

In May, the rate had jumped 4.8 percent to 1.34 million, leading many to believe that new housing development would continue growing. On Tuesday, the National Association of Home Builders released its monthly Housing Market Index, revealing that developers remain optimistic that the housing shortage would be a boon for new construction.

“The market has a long way to go to get back to a normal level of 1.2 million single-family starts,” said Danielle Hale, chief economist at realtor.com. “If starts grow like they’ve grown in the last quarter, it’s going to take until March 2022 to get back to average starts at that level.”

Email Veronika Bondarenko

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×