The drop in construction starts was most concentrated among single-family units, which were down 15.7% from a year ago.

The number of permits for construction of single-family homes and some multi-family buildings also fell in June from May, on a seasonally-adjusted basis. All new building permits fell 0.6% from May while single-family permits dropped more significantly by 8%. Compared to a year ago, all permits are actually up 1.4%, but those for single-family homes are down 11.4%

Multi-family building continues on largely because rents are so high.

"Given that nationwide rents have grown by 14% or more year-over-year in each month of 2022 so far and that active for-sale inventory is 28% higher than last year, it's unsurprising that builders are currently more keen on multi-family rental construction," said Berner.

This construction slowdown comes even as the price of lumber bottomed out in June, Berner said. But the relief in those prices might not last long.

"With lumber prices creeping back up in July and homebuyer demand being stifled by the rising cost of financing a home purchase, it's unlikely that much progress will be made toward closing the housing supply gap any time soon," Berner said. "In the meantime, prospective first-time homebuyers who are taking a pause from their search may find more options to rent if multifamily projects continue to receive more attention from builders."

The drop in construction starts was most concentrated among single-family units, which were down 15.7% from a year ago.

The number of permits for construction of single-family homes and some multi-family buildings also fell in June from May, on a seasonally-adjusted basis. All new building permits fell 0.6% from May while single-family permits dropped more significantly by 8%. Compared to a year ago, all permits are actually up 1.4%, but those for single-family homes are down 11.4%

Multi-family building continues on largely because rents are so high.

"Given that nationwide rents have grown by 14% or more year-over-year in each month of 2022 so far and that active for-sale inventory is 28% higher than last year, it's unsurprising that builders are currently more keen on multi-family rental construction," said Berner.

This construction slowdown comes even as the price of lumber bottomed out in June, Berner said. But the relief in those prices might not last long.

"With lumber prices creeping back up in July and homebuyer demand being stifled by the rising cost of financing a home purchase, it's unlikely that much progress will be made toward closing the housing supply gap any time soon," Berner said. "In the meantime, prospective first-time homebuyers who are taking a pause from their search may find more options to rent if multifamily projects continue to receive more attention from builders."