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Overall housing starts decreased 8.5% in August to a seasonally adjusted annual rate of 1.31 million units as affordability challenges continue, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The August reading of 1.31 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Single-family starts decreased 7% to an 890,000 seasonally adjusted annual rate and are down 4.9% on a year-to-date basis, the lowest reading since July of 2024.
“Housing affordability is hurting buyer traffic for builders, and as a result, builders have slowed single-family home construction,” says Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a homebuilder and developer from Lexington, North Carolina. “Nonetheless, our latest survey shows builders reported an increase for future market expectations as mortgage rates have posted a modest decline in recent weeks.”
Combined single-family and multifamily starts were 8.3% higher in the Northeast, 15% higher in the Midwest, 3.5% lower in the South and 0.1% higher in the West.
“With the Fed expected to reduce the federal funds rate later today, this return to monetary policy easing will help the mortgage market indirectly and lead to lower interest rates for building and land development loans, which will help builders to boost housing production,” says NAHB chief economist Robert Dietz.
Overall permits decreased 3.7% to 1.31-million-unit annualized rate in August. Single-family permits decreased 2.2% to an 856,000-unit rate and are down 7% on a year-to-date basis. Multifamily permits decreased 6.4% to a 456,000 pace.
