US Housing Starts (Jun. 2026)

Rebound in homebuilding not as good as it looks

The strong rebound in housing starts in June wasn’t quite as promising the headline number suggests, as it was entirely driven by a surge in the volatile multifamily sector. Moreover, the fall in building permits and further rise in mortgage rates last month point to a renewed slowdown in homebuilding.

Housing starts rose by 19% m/m in June to 1.43m annualised, from upwardly revised 1.20m. However, the details were less encouraging. The increase was entirely driven by a sharp rebound in the typically volatile multi-family segment, where starts jumped 76.3% m/m to 513,000 annualised. In contrast, single-family starts inched down by 0.2% m/m to 895,000, it’s lowest level since January. Meanwhile, building permits – which tend to be a good leading indicator of housing starts – fell by 3% m/m to 1.37m annualised.

Altogether, the latest data doesn’t change our view that homebuilding will slow from here. Homebuilder confidence deteriorated in July. And the rise in treasury yields so far this month on the back of the re-escalation of US-Iran hostilities suggest that the 30-year fixed mortgage rate – which crept up to 6.59% last month from 6.56% in May – will rise further. We expect starts to trend down to about 1.3m by the end of the year.