Single-Family Starts Fall to Lowest Level Since 2022

The July seasonally adjusted annual rate (SAAR) for single-family starts dropped to its lowest level since November 2022 at 808,000 units, according to the latest data release from the U.S. Census Bureau and the Department of Housing and Urban Development. Starts fell 9.9% from June and 15.7% from one year ago.

Increasing mortgage rates and constructions costs coupled with lower consumer and builder confidence has slowed new residential development and kept the 12-month average for annualized starts at around 900,000 units since last July. Over the previous 12 months, the annualized single-family start rate exceeded one million units six times.

Multifamily starts have generally increased since mid-to-late 2024, though the monthly seasonally adjusted annual rates have been more volatile. July’s SAAR of 421,000 units was down 15.6% from June and 7.1% below the rate from last July. Together with the small plex category, total residential starts were down 12.4% for the month and 13.5% for the year to 1.239 million units.

The forward-looking building permits data had single-family permitting up 2.5% from June and 1.1% from last year to 894,000 units. The annualized SAAR for multifamily permitting increased 9.1% from last month and 6.3% from last year to 490,000 units in July. Total residential permitting increased 5% for the month and 3.1% for the year to 1.443 million units.

Multifamily completions were down 25.6% from last July and 14.8% for the month to 329,000 units. Meanwhile, single-family completions fell 12.8% from last year to 878,000 units and were down 5.8% from June.

The SAAR for multifamily units under construction decreased 4.4% from last July to 666,000 units but were up a slight 0.8% for the month. Single-family units under construction were down 7.2% for the year and 1.2% from June at 579,000 units.

Compared to one year ago, the annual rate for multifamily permitting decreased in two of the four regions, with only moderate declines in the South (down 4.9% to 211,000 units) and the Midwest (down 2.3% to 83,000 units). The small Northeast region saw an increase of 31% in annual multifamily permitting to 80,000 units in July, followed by a 24.9% increase in the West to 115,000 units. Compared to the previous month, permitting was down in the Northeast and up in the remaining regions.

Annualized multifamily starts increased sharply in the Northeast region (up almost 176% to 119,000 units) and in the West (up 106.9% to 106,000 units). The Midwest region’s multifamily starts decreased 49.6% to 58,000 units, while the South region saw starts decrease 43.1% to 140,000 units. Compared to June’s SAAR, starts were up strongly in the Northeast and slightly in the West but down by more than a third in the Midwest and South regions.