August 2026: Building permits declined while single-family completions fell to the lowest pace since 2019 

Key findings

• Building permits issued fell 2.7% from July to a seasonally adjusted annual rate (SAAR) of 1.394 million in August, suggesting further slowdown in homebuilding activity.
• Housing starts declined 2.6% from July to 1.275 million SAAR in August, down 2.6% from July, driven by a sharp 22.5% drop in multifamily starts (buildings with 5+ units). 
• Single-family housing starts jumped 7.6% from July to 918 thousand SAAR in August as homebuilders worked down backlogs of unfinished homes.
• Single-family completions declined 10.4% from July to 816 thousand SAAR in August — the lowest since February 2019 — while homebuilders recalibrate supply in response to softening demand.

Single-family housing starts surged in August, but headwinds are rising

Single-family housing starts rose 7.6% to 918 thousand SAAR in August, but the rate of groundbreaking in January through August remained 4.9% below the same period last year. The strong August gains are unlikely to be sustained through the rest of the year.

In addition to elevated mortgage rates and economic uncertainty weighing on buyer demand, rising resale inventory suggests increased competition for homebuilders this year. Zillow data indicates there were 1.41 million homes for sale nationwide in August, up 3% from a year ago. Buyers can find additional fresh options, with new for-sale listings rising 2.4% from a year ago.

In response to a softer market, homebuilders are pulling back. Single-family completions fell 10.4% from July to 816 thousand SAAR in August — the lowest since February 2019. Authorized single-family permits declined 1.8% to 878 thousand SAAR. Recent declines in permits indicate completions will likely slow further. 

Residential permitting is running below the pre-pandemic trajectory. Zillow analysis of the Census Bureau's Survey of Construction (SOC) microdata indicates falling permits were more concentrated in metro areas where new construction activity has been highest in recent years, such as San Antonio, Austin, and Baltimore.

While homebuilders have been adapting to the softer market by offering concessions and building smaller homes, mortgage rates are widely expected to stay elevated through the remainder of this year, and concerns over rising material costs and ongoing skilled labor shortages have been dampening homebuilder sentiment. Meanwhile, the nation is staring at a 4.7 million housing deficit, raising concerns for the affordability outlook in the years ahead.