US Housing Starts Drop Sharply in July 2026, Approaching Post-COVID Lows Amid Persistent Affordability Challenges
Census Bureau data verifies July 2026 housing starts plunged 12.4% MoM to near COVID-era lows, while permits rose; this reflects ongoing real estate headwinds from rates and costs impacting millions.
Official data from the U.S. Census Bureau confirms a significant decline in privately-owned housing starts for July 2026, falling 12.4% month-over-month to a seasonally adjusted annual rate of 1,239,000 units from June's revised 1,415,000. This marks a 13.5% drop from July 2025 levels and brings starts near post-pandemic lows.
Building permits, a forward-looking indicator, rose 5.0% to 1,443,000, exceeding expectations and reversing prior declines. Single-family starts fell 9.9% to 808,000, while multi-family units also weakened after a June surge.
This aligns with broader sector pressures including elevated mortgage rates, high material and land costs, and builder sentiment hitting yearly lows, as noted in related reports. Existing home sales also declined 1.7% in July amid record prices and financing hurdles.
The slowdown signals continued strain on new construction, potentially exacerbating inventory shortages and affordability issues for homebuyers and investors over the coming year, with ripple effects on related industries and household formation.
[Census Bureau / Fed Analysts]: Persistent high rates and costs will likely sustain low starts into 2027, delaying inventory relief and pressuring affordability for new buyers while favoring rental markets.
Sources (5)
- [1]New Residential Construction Press Release(https://www.census.gov/construction/nrc/current/index.html)
- [2]MONTHLY NEW RESIDENTIAL CONSTRUCTION, JULY 2026(https://www.census.gov/construction/nrc/pdf/newresconst.pdf)
- [3]New Privately-Owned Housing Units Started: Total Units - FRED(https://fred.stlouisfed.org/series/HOUST)
- [4]United States Housing Starts - Trading Economics(https://tradingeconomics.com/united-states/housing-starts)
- [5]US existing homes fall 1.7% in July(https://abcnews.com/Business/wireStory/us-existing-homes-fall-17-july-record-prices-high-mortgage-rates-stifle-would-be-buyers-135546362)