Single-family housing starts in the United States dropped by 7.0 per cent in August to a seasonally adjusted annual rate of about 890,000 units, marking the lowest level since April 2023, according to Commerce Department data. Permits for future single-family construction fell 2.2 per cent to roughly 856,000 units, underscoring weakening builder confidence. Overall housing starts, including multifamily units, tumbled 8.5 per cent month-on-month to 1.307 million units.
Builders are struggling under a glut of unsold newly built homes and cooling demand, even as mortgage rates eased. The 30-year fixed mortgage rate recently reached about 6.35 per cent, the lowest in nearly a year, down from over 7 per cent earlier in the year. Expectations that the Federal Reserve will resume cutting interest rates have partially driven this decline, though tighter labour markets and job concerns are dampening buyer enthusiasm.
Multifamily housing projects—those involving five or more units—also saw sharp declines. Starts in that segment dropped approximately 11 per cent to 403,000 units, while overall permitting slipped across both single-family and multifamily sectors. Economists point out that the pullback in construction is a response to inventory levels that are high relative to demand.
Regions are diverging. Declines in single-family starts and permits were especially pronounced in the South, while regions including the Northeast, Midwest, and West showed better resilience. Some areas even registered modest increases in permits or starts, but they were insufficient to counterbalance the national downturn.
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