• Building permits issued in July fell to  1,354,000 (SAAR). That’s 2.8% below the revised June rate and  5.7% lower than a year ago.
• Housing starts increased to 1,428,000 (SAAR) in July, up 5.2% from the revised June estimate and 12.9% higher than a year ago, according to the U.S. Census Bureau.
• Single-family housing starts increased to 939,000(SAAR) in July, increasing 2.8% from the June estimate and 7.8% higher than in July 2024.

What happened: Housing starts increased again in July, mostly due to a slight rebound in multifamily construction. While single-family starts also increased, the uptick is likely temporary. Slowing price growth, weaker than expected sales along with rising input costs are a drag on builder confidence. Permitting activity remains weak and points to sluggish new home construction. With so many homes already under construction, starts aren’t likely to rebound meaningfully. In July, single-family starts increased in the South. However, single-family starts are lower than year-ago levels in every other region. 

The silver lining: mortgage rates have eased somewhat since May, which could help support home sales in the coming months.

Why this matters: Many builders pumped the brakes on new projects this year. The total number of single-family permits in the first half of this year fell below year ago levels. 

Despite a small improvement in housing affordability this year, home sales continued to bounce along the bottom. The slower than expected home shopping season has caused the number of unsold new homes to accumulate, weighing on builder confidence.

According to the National Association of Home Builders, the share of builders cutting their prices and the use of incentives are on the rise. In June, the median price per square foot of new construction homes was down 1.5% from a year ago according to Zillow data.