Key facts
- Single-family housing starts dropped 9.9% in July to a seasonally adjusted annual rate of 808,000 units.
- Single-family homebuilding decreased by 15.7% year-on-year in July.
- Permits for future single-family home construction increased by 2.5% to 894,000 units.
- Total new home starts, including multifamily structures, fell 12.4% to 1.239 million units.
- Overall residential construction permits rose 5.0% to 1.443 million units.
U.S. single-family homebuilding experienced a significant decline in July, with starts falling 9.9% to a seasonally adjusted annual rate of 808,000 units, the lowest since February 2021. This drop, which represents a 15.7% decrease year-on-year, was attributed to elevated mortgage rates and a limited supply of unsold new homes.
Despite the decline in starts, permits for future single-family home construction saw a modest increase of 2.5% to 894,000 units. Overall new residential construction starts, encompassing multifamily structures, decreased by 12.4% to 1.239 million units, falling short of economists' expectations. However, total residential construction permits for all types of housing units rose by 5.0% to 1.443 million units.
The residential real estate market continues to face headwinds from high mortgage interest rates, which remain near their highest in over a year, and a general shortage of available homes, impacting affordability and sales. While sentiment among homebuilders showed a slight uptick, overall confidence remains subdued due to economic uncertainty and high building costs.