Government data shows overall housing starts fell 9.8% in May, bringing the seasonally adjusted annual rate to 1.26 million units. While single-family starts ticked up 0.4% month over month to 924,000, they remain down 7.3% compared to May 2024.
On a year-to-date basis, single-family starts are down 7.1%, while multifamily 5-plus unit starts are up 14.5%, reflecting a growing preference for rentals as affordability worsens.
Despite slightly lower mortgage rates compared to last year, the cost of homeownership continues to strain first-time buyers. A typical household would now need a $17,000 income boost just to afford a median-priced home—something they could have achieved on 2019 earnings.
Zillow’s report also highlights how metro areas with fewer regulatory barriers have seen more rapid construction and better pricing outcomes. The firm says relaxing zoning rules to allow higher-density housing could make a meaningful impact in reducing the deficit, especially in high-barrier markets like New York, Los Angeles, Boston, San Francisco, and Washington, D.C., where shortages are most severe.
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