- US single-family homebuilding dropped 9.9% in July to 808,000 units annualized
- Single-family starts fell 15.7% year-on-year, showing ongoing market strain
- Single-family permits rose 2.5% month-on-month, indicating future construction
US single-family homebuilding weakened sharply in July, pointing to continued pressure on the housing market as elevated mortgage rates and unsold inventory discourage builders.
Single-family housing starts fell 9.9% in July from the previous month to a seasonally adjusted annual rate of 808,000 units, according to data from the US Commerce Department's Census Bureau. The decline was even steeper on an annual basis, with single-family construction down 15.7% from July 2025, as per Reuters.
The July decline highlights the continuing strain on the US housing market. High borrowing costs have reduced affordability for buyers, while a buildup of unsold new homes has made builders more cautious about starting additional projects.
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Single-Family Permits Offer Some Relief
The weakness in housing starts was partly offset by an increase in permits, which indicate future construction activity.
Permits for single-family homes rose 2.5% month-on-month to an annualised rate of 894,000 units in July. They were also 1.1% higher than a year earlier.
Across the broader residential market, total housing starts, including apartments and other multifamily structures, fell 12.4% to 1.239 million units. That was below economists' expectation of a 1.35 million-unit rate.
At the same time, overall residential building permits increased 5% to 1.443 million units, exceeding the 1.37 million rate economists had expected.
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Mortgage Rates Remain A Major Headwind
Financing costs continue to weigh heavily on housing demand. The rate on a popular 30-year fixed mortgage stood at 6.77% in the week ended August 7.
Although the rate declined for the first time since mid-June, it remained close to its highest level in more than a year.
The housing sector is also facing higher construction and transportation costs. Recent economic uncertainty and the US-led war with Iran have added further pressure through elevated fuel and material costs.
The latest figures suggest that while permits point to some future construction activity, builders remain constrained by weak affordability, high financing costs and subdued demand. The housing market therefore continues to face a difficult path toward a sustained recovery.
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