U.S. Housing Starts and Permits (July 2026)

Homebuilding activity pulls back in July

• Housing starts fell 12.4% month-on-month (m/m) in July to 1.24 million (annualized) units, coming in below the consensus forecast for 1.30 million units. This was the second-lowest reading in the post-pandemic period after May 2026.  
• The decline was equally split between a 9.9% decline in the single-family segment (-89k units) and a 16.8% decline in multifamily segment (-87k units). Activity in the single-family space has fallen in three of the last four months, while July decline in the multifamily segment retraced only part of the sharp 77% gain of the month prior.
• Residential permits moved in the opposite direction, rising 5.0% m/m to 1.44 million annualized units, led by a 9.4% gain in multi-family permits. Single-family permits rose by a more moderate 2.5%.
• Housing starts fell across three of the four Census regions, with activity declining by 27.6% in the Midwest, 13.8% in the West, and 12.6% in the South. Starts were up only in the Northeast (+17.1%), with the region recording the second consecutive monthly gain.
   

Key Implications

• July's decline in housing starts reinforces the view that homebuilding activity remains soft, with both the single-family and multifamily segments contributing to this month's pullback. While the increase in permits points to a modest rebound in the months ahead, the broader trend remains subdued by historical standards. Starts in the larger single-family segment have fallen in three of the past four months and are now tracking near the lower end of their post-pandemic range, reflecting ongoing affordability challenges.
• Demand conditions continue to pose a challenge for homebuilders. Mortgage rates have moved back up near 6.7%, while the supply of new homes remains elevated at more than nine months of supply at the current sales pace. Although new home sales have generally held up better than existing home sales, builders continue to rely on pricing concessions and incentives to move inventory. With mortgage rates remaining elevated, the Fed likely to remain on hold for some time, and construction costs once again moving higher, homebuilding activity is likely to remain subdued through the second half of 2026.
  
   
  
  
   

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