Overview
- The U.S. Census and HUD report showed overall housing starts fell about 2.6% in August to a 1.275 million annualized pace after a steep drop in multifamily projects.
- Single-family starts rose 7.6% to roughly 918,000 units but single-family building permits fell 1.8 to an annualized 878,000, signaling the rebound may be short lived.
- Starts for buildings with five units or more plunged about 22% to near 344,000 units and multifamily permits also declined, removing a major source of new housing supply.
- The Federal Reserve’s recent 25 basis point hike and higher Treasury yields have pushed 30-year mortgage rates into the mid-to-high 6% range, which is reducing buyer affordability and cooling builder demand.
- Completions dropped nearly 12% to the weakest pace since 2018, builder sentiment slid to a one-year low, and private forecasters have cut starts forecasts for 2026–2027, all of which point to weaker residential investment and a drag on near-term GDP growth.