Renter Nation Returns? Massive Jump In Multi-Family Unit Starts Despite Builder Sentiment Slump

US Housing Starts exploded higher by 19% MoM in June, dramatically more than the already large 11.2% MoM expectation and rebounding from the prior two ugly monthly declines.

This was the biggest monthly increase in Starts since May 2023.

On the other side, the more forward-looking Building Permits declined for a second straight month...

This shouldn't be a total surprise after yesterday's decline in builder sentiment (confidence among US homebuilders dropped for a second month to the lowest level of the year, dragged lower by elevated borrowing costs and higher material and land prices).

The surge in Starts was dominated by a massive rebound in multi-family units.

• Single-family down 0.2% to 895K

• Multi-family (rentals) soar 76.3% to 513K from 293K, fully reversing the May drop from 494K to 291K

We can't help but question WTF happened in the May multi-family starts data...

Permits were down among both cohorts:

• single family down 2.4% to 871K SAAR, lowest since August '25

• multi-family down to 4.9% to 445K SAAR, lowest since March '26

Additionally, Building Permits are tracking rate-hike expectations (inverted)...

Multi-family Starts are back above Permits (perhaps signaling the short-term peak)...

It seems recent rises in the mortgage rate (and inventories already at over-stuffed levels, given the slowness of sales) has finally dented the homebuilders' self-satisfying confidence... and the lack of affordability leaves the American Dream fading into Renter Nation...