While home sales continue to dip in 2021, new data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau shows overall housing starts increased 6.3% in June to a seasonally adjusted annual rate of 1.64 million units.

The count of single-family homes currently under construction is 675,000, up 32% compared to a year ago, while the number of multifamily units under construction is up 2% to 684,000 apartments.

There is a downside, however. Despite the increase in housing production, there is concern over weakening permit numbers for both the single-family and multifamily markets. Overall permits decreased 5.1% to a 1.60 million unit annualized rate in June. Single-family permits decreased 6.3% to a 1.06 million unit rate, while multifamily permits decreased 2.6% to a 535,000 pace.

“The recent weakening of single-family and multifamily permits is due to higher material costs, which have pushed new home prices higher since the end of last year,” says National Association of Home Builders (NAHB) chief economist Robert Dietz. “This is a challenge for a housing market that needs additional inventory.”

The June reading of 1.64 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 6.3% to a 1.16 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 6.2% to a 483,000 pace.

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“While lumber prices have just recently begun to trend downward, builders continue to deal with rising prices of other building materials, such as oriented strand board, and major delays in the delivery of these goods,” says Chuck Fowke, chairman of the NAHB and a custom home builder from Tampa, Fla. “We are thankful that the White House recently held a meeting to seek solutions to these supply chain issues that are harming housing affordability.”

On a regional and year-to-date basis (January through June of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 41.4% higher in the Northeast, 25.5% higher in the Midwest, 21.5% higher in the South and 28.0% higher in the West. Looking at regional permit data on a year-to-date basis, permits are 33.2% higher in the Northeast, 31.9% higher in the Midwest, 29.6% higher in the South and 32.2% higher in the West.