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U.S. Housing Starts and Permits (August 2025)

Andrew Foran, Economist | 416-350-8927

Date Published: September 17, 2025

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Homebuilding activity declined in August

  • Housing starts fell 8.5% month-on-month (m/m) in August to 1.31 million (annualized) units, weaker than consensus expectations for a 4.4% m/m decline. Revisions to the data for the two prior months added 25k units to the previously reported tallies.
  • August's contraction in housing starts was equally split between the single-family and multi-family segments, with the former down 7.0% m/m and the latter down 11.7% m/m.
  • Residential permits fell 3.7% m/m to 1.31 million annualized units. Permitting activity declined in the multi-family segment (-6.4% m/m) and the single-family segment (-2.2% m/m).
  • Among the four Census regions, gains were recorded in the West (+30.4% m/m) and the Northeast (+9.2% m/m). Declines were recorded in the South (-21.0% m/m) and the Midwest (-10.9% m/m).

Key Implications

  • Homebuilding activity declined in August as the rebound in the multi-family segment recorded over the past few months lost steam and building activity in the larger single-family market continued to fall modestly. Amid rising construction costs related to tariffs and softening demand conditions, in part stemming from the weakened labor market, homebuilders have remained cautious on aggregate.
  • This was also indicated by the subdued reading for homebuilder sentiment in September according to the National Association of Homebuilders' survey. Despite the aggregate index continuing to flirt with multi-year lows, homebuilders have become slightly more optimistic about future sales, in large part owing to the expectation for the first interest rate cut of the year to be delivered by the Federal Reserve later today. Easing financial conditions through the coming year will likely help to support demand for new homes, but this will take time to have a material influence on demand, with the near-term outlook still expected to be clouded by elevated trade costs and slowing economic growth.  

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