As fall creeps closer, summer begins its conclusion with slight drops and gains in new construction nationwide—a consistent trend this past year—but with a surprise in the Northeast.
In the U.S. Census Bureau’s July Residential Construction report, privately owned housing starts increased 5.2% to nearly 1.43 million and increased 12.9% over the past year. Single-family housing starts also increased at a rate of 939,000—or 2.8% above the revised June rate.
As for permits, the Bureau found that privately owned housing permits were at a seasonally adjusted annual rate over 1.35 million, down 2.8% from the revised June rate and down 5.7% from the July 2024 number. Single-family authorizations marginally increased by 0.5% from the June figure, but fell 7.9% from last year.
“The slowdown in single-family homebuilding has narrowed the homebuilding pipeline,” said National Association of Home Builders (NAHB) Chief Economist Robert Dietz in a statement. “There are currently 621,000 single-family homes under construction, down 1% in July and 3.7% lower than a year ago. This is the lowest level since early 2021 as builders pull back on supply.”
Even though housing starts are increasing nationwide, regionally it’s a different story. Builders in the Northeast and West are seemingly taking a step back from housing starts, leading to a decline as shown in the report.
Two regions fell in housing starts overall. The Northeast fell by 26% since June, and fell even more (35.5%) since July 2024. The West fell by 27.5% over the past month and dropped by 14.4% in the past year.
Developers in the other regions are picking up the slack. The Midwest saw the biggest increase over the past month at 33.3%, and 40.8% year-over-year. Southern starts increased by 19.2% for the month and 29.5% over the past year.
Even though Midwestern housing starts increased dramatically, single-family unit starts decreased by 15% since last month, and dropped 2.3% in the last year. However, single-family units in the South increased overall by 13.2% since June, and 21.8% since last year.
The South was the only region to have an increase in housing starts for single-family units.
“Single-family production continues to operate at reduced levels due to ongoing housing affordability challenges, including persistently high mortgage rates, the skilled labor shortage and excessive regulatory costs,” said Buddy Hughes, an NAHB chairman, in emailed comments on the report. “These headwinds were reflected in our latest builder survey, which indicates that affordability is the top challenge to the housing market.”
While housing starts are falling behind in most regions, the permitting rate also saw both marginal and significant changes all around.
Regionally, the Northeast overwhelmingly experienced the greatest change from month-to-month. Privately owned housing permits in the Northeast increased by 25.2% since June, with a 3.6% increase in single-family units. On a year-to-year basis, the total number of permits dropped 7.9%, while permits for single-family homes dropped 1.7%.
Meanwhile, Western permits had the most severe drop since June—10.1%—with single-family units dropping 0.6%. The year-to-year basis appears even more bleak, as both the total number of housing permits and single-family permits dropped by over 15%.
The Midwest saw a slight 0.5% increase since June, but greatly increased by 12.9% since last year. And while there was no change in single-family permits from June, they did increase by 3.4% since last year. Like the West, Southern permits dropped for both month-to-month and year-to-year by 4.6% and 6.1%, respectively. Single-family permits increased slightly by 0.6% month-to-month, but fell 8.3% from last year.
NAHB chose to highlight the regional year-to-date changes—which are not seasonally adjusted. By that measure, the combined single-family and multifamily housing starts were 10.2% higher in the Northeast, 17.7% higher in the Midwest, 2.4% lower in the South and 0.5% lower in the West.
For the full housing starts update, click here.
