Multifamily Surge Fuels Jump In US Housing Starts For June

US housing starts surged in June, driven by multifamily. Oxford Economics expects single-family growth to stay muted until rates ease.

July 21, 2026

Nina Dale

US housing starts rose 19% in June, driven by a 76% multifamily spike, while single-family activity stalled, per Oxford Economics.
Multifamily gains were strongest in the Midwest and South, but building permits fell 3%, signaling softer starts ahead.
Current strength in multifamily is unlikely to sustain without lower rates, keeping residential investment growth modest through 2027.

Key Takeaways

Multifamily Capitalizes On Volatile Construction Pipeline

US housing construction surprised to the upside in June, with starts climbing 19% to a seasonally adjusted annual rate of 1.427M, according to Oxford Economics. While the headline looks bullish, Globe St reports single-family starts remained essentially flat—down 0.2%—leaving multifamily projects to account for June’s outperformance. Oxford Economics attributes this spike to a sharp 76.2% rebound in multifamily, after May’s puzzling slump. The jump in apartment construction underscores developers’ willingness to proceed with new product, even as overall residential investment remains cautious and financing costs run high.

Despite June’s momentum, Oxford Economics cautions that the overall foundation for housing starts remains shaky, with single-family builders still working through excess inventory and high mortgage rates discouraging buyers. Until borrowing costs ease, a broad-based residential construction breakout looks unlikely.

The Details

June housing starts rose well above forecasts, climbing from the 1.31M consensus estimate to 1.427M. Multifamily construction drove almost all of the increase. Meanwhile, single-family starts stayed flat despite accounting for more than two-thirds of national activity. Multifamily growth spread across most regions, with the Midwest and South posting the strongest gains.

At the same time, the future pipeline weakened. Total building permits fell 3% to 1.367M. Both single-family and multifamily permits declined, signaling weaker construction activity ahead. Oxford’s tracker showed real residential investment grew just 0.9% annualized in Q1 2026. Units under construction also remained flat during Q2.

Line chart showing US building permits from 2016 to 2026. Single-family and multifamily permits trend lower, signaling a flatter construction pipeline despite recent housing start gains.

Regional Multifamily Rebound Pushes Midwest, South Ahead

June’s multifamily surge reached beyond a single market. The Midwest and South led the gains, with both regions posting above-average apartment starts. By comparison, single-family groundbreakings declined across every region. The broader multifamily rebound suggests continued rental demand in high-growth markets. Migration and demographic trends likely continue supporting that demand.

Line chart showing US housing starts by region from 2016 to 2026. The South leads construction activity, while June gains reflect a broad multifamily rebound across regions, especially in the Midwest and South.

However, building permits fell across both asset classes. That decline suggests deliveries will not accelerate soon. Multifamily developers may uncover new regional opportunities. Even so, they should expect a less predictable project pipeline through the rest of 2026.

Why It Matters

The 76% jump in multifamily starts strengthened overall construction data. However, it also masked weaker momentum elsewhere. Oxford Economics noted that multifamily projects often create sharp swings because of their timing and scale. Meanwhile, single-family supply remains constrained by slow absorption and high financing costs.

Line chart showing US housing starts from 2016 to 2026, with volatile multifamily starts driving recent gains while single-family starts remain relatively flat.

The firm also argues that units under construction drive residential investment more than headline starts. On that measure, the market remains flat. Residential investment grew less than 1%, while permit activity continued declining. As a result, developers must balance near-term opportunities with longer-term caution.

CRE investors should stay selective. The Midwest and South still offer favorable conditions for multifamily projects. That approach aligns with Oxford Economics’ recent view that disciplined investors can find opportunities despite slower market conditions. However, declining permits and weak residential spending do not support widespread speculative development. Investors may benefit more from projects already under construction. They should also prioritize markets with stronger demand fundamentals. A sustained development rebound will likely wait until 2027 or later. Lower interest rates and tighter builder inventories should support that next cycle.

What’s Next

Oxford Economics expects housing starts to remain mostly flat over the next 18 months. Stronger multifamily performance should offset sluggish single-family activity. A broader construction recovery still depends on lower interest rates, faster inventory absorption, and clearer long-term demand.

Multifamily developers may use the next 12 to 18 months to complete projects already underway. However, new groundbreakings will likely stay limited until market conditions improve. Regional opportunities should continue emerging, but developers should deploy capital carefully on new projects.