New residential construction activity declined sharply in May, according to the latest data from the U.S. Census Bureau. Housing starts fell 9.8% from April to a seasonally adjusted annual rate of 1.256 million units. That figure is also 4.6% lower than the same period last year.
Single-family housing starts edged up slightly to 924,000 units, while multifamily construction dropped significantly, with starts for buildings with five or more units falling to 316,000. Building permits, a leading indicator of future construction, declined by 2.0% to 1.393 million. Single-family permits fell 2.7% to 898,000—1.0% below May 2024 levels.
In contrast, housing completions rose 5.4% to 1.526 million units, with single-family completions jumping 8.1% to just over 1 million, signaling continued progress on projects already underway.
“Our latest builder survey shows that development and market conditions remain a major concern for builders, with consumer confidence lower and elevated interest rates for buyers and builders,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, North Carolina. “Almost 40% of home builders reduced sales prices in the last month in order to offset difficult housing affordability conditions.”
“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,” added NAHB Chief Economist Robert Dietz. “NAHB is forecasting that 2025 will end with a decline for single-family housing starts.”
