Key facts
- Homebuilder sentiment fell to 34 in July, marking 15 consecutive months below 40.
- Single-family housing starts decreased 0.2% to 895,000 units in June.
- Permits for future single-family home construction fell 2.4% to 871,000 units in June.
- Pending home sales declined 5.4% in June.
- The 30-year fixed-mortgage rate hit 6.55%.
Homebuilder sentiment in the U.S. declined to 34 in July, marking the 15th consecutive month below the 40 threshold, indicating persistent affordability challenges. This downturn coincides with a 0.2% drop in single-family housing starts to an annual rate of 895,000 units and a 2.4% decrease in permits for future construction to 871,000 units in June.
High mortgage rates, which reached an 11-month high of 6.55% for the popular 30-year fixed loan, alongside economic uncertainty, rising material and land costs, are weighing on the sector. Pending home sales also fell 5.4% in June, reflecting weaker buyer activity.
Despite a national housing shortage, the inventory of unsold new homes is near levels last seen during the 2007 housing market collapse. Builders are looking to a recently enacted bipartisan housing affordability legislation for potential relief, though its implementation is expected to take time. The bill became law despite President Donald Trump not signing it, as he demanded a separate voting bill be passed.