US housing starts unexpectedly plunge 15.4% in May

US housing starts fell sharply in May, missing market expectations by a wide margin and signaling weakness in residential construction activity, according to data released Tuesday by the Census Bureau and the Department of Housing and Urban Development.

Privately owned housing starts fell 15.4% month-on-month to a seasonally adjusted annual rate of 1.18 million units in May, well below market expectations of 1.43 million. The figure was also down 8.7% from a year earlier.

Single-family housing starts declined 1.9% from April to an annual rate of 882,000 units. Construction of multifamily housing also weakened, with starts for buildings containing five units or more totaling 284,000.

Building permits, a key indicator of future construction activity, fell 0.7% from April to a seasonally adjusted annual rate of 1.41 million and were 0.2% lower than a year earlier.

Single-family permits edged up 0.6% to 886,000, while permits for buildings with five units or more stood at 474,000.

Housing completions also declined, falling 8.1% from April to an annual rate of 1.31 million. Completions were down 14.2% compared with May 2025.

Residential construction data is closely monitored by investors, economists and policymakers because it provides an early signal on housing supply, construction-sector activity, demand for building materials and household confidence.

Housing starts also feed into gross domestic product through residential investment, making the data an important gauge of momentum in the world’s largest economy.​​​​​​​