Single-family housing starts edged lower in June as weak homebuying demand and margin pressure continued to constrain builders’ appetite for adding new supply.

The annual pace of single-family starts slid 0.2% from May and landed 3.2% below year-ago levels in June, according to residential construction data released Friday by the U.S. Census Bureau and Department of Housing and Urban Development. In May, starts were more than 6% lower on an annual basis. 

Permits for future single-family construction also declined in June, falling 2.4% from May and landing about 0.2% below year-ago levels, as the single-family construction market headed toward a second consecutive year of contraction.

Single-family permits — a measure of forward-looking construction activity — ended 4.3% lower year to date through the end of the second quarter, while single-family starts were 5.3% lower year to date.

Regional differences in construction activity show how the pullback in starts and permits is creating uneven supply and demand pressures across housing markets, though all four major U.S. regions have shown year-to-date declines.

Single-family starts were 14.3% lower through the first half of 2026 in the Northeast, compared to year-to-date declines of 8.3% in the West, 7.1% in the Midwest and 2.6% in the South.

Regarding permits, single-family authorizations are 9.3% lower year to date in the Northeast, 6.8% lower in the West and down 6.3% in the South, while posting 1.3% growth through the second quarter in the Midwest.

Back-to-back years of declining new-home sales — fueled by persistent affordability challenges and abiding homebuyer uncertainty — account for builders’ reluctance to add slow-selling inventory to bloated new-home backlogs.

Nationwide, completions of newly built single-family homes were ultimately 6.6% higher than May and 5.5% higher than a year ago as builders finished up projects in their pipelines.

There is little optimism that the downward trend in starts and permits will reverse in the second half of 2026, as resurgent inflation, mortgage rates closing in on year-ago levels and broader economic volatility continue to suppress purchase demand.

The National Association of Home Builders (NAHB) said this week that home builder confidence in current and six-month sales conditions declined in July — sales sentiment that has remained in negative territory since early 2024.

Meanwhile, the Mortgage Bankers Association published its latest new-home mortgage application data on Thursday showing applications fell 6% from May to June, while remaining about 2.4% higher than a year ago.

Reflecting the slowdown in new-home demand and pressure on sales teams to offload completed inventory, the NAHB said more home builders reported using sales incentives in June, including a larger of price reductions.