Construction on new homes fell 13.5% year-over-year in July to a seasonally adjusted annual rate of 1,239,000 units, even as builders pulled 5.0% more permits than the month before, according to the Census Bureau’s New Residential Construction report. The gap between falling starts and rising permits has left economists describing the fall housing outlook as unusually muddled.
Key Numbers
- Housing starts: 1,239,000 annualized units, down 12.4% from June and down 13.5% from July 2025
- Building permits: 1,443,000 annualized units, up 5.0% from June and up 3.1% year-over-year
- Completions: 1,212,000 annualized units, down 9.1% from June and down 16.8% from a year earlier
- Single-family starts: 808,000, down 15.7% year-over-year
- Single-family permits: 894,000, up 1.1% year-over-year
Two Numbers Moving in Opposite Directions
Starts measure ground actually broken on new houses in a given month, while permits measure the paperwork builders file before they begin, a leading indicator of what’s coming. When starts fall and permits rise at the same time, it typically means builders are lining up approvals for future projects while pumping the brakes on work they’d normally begin right away, often because they’re waiting to see whether buyer demand and financing costs improve before committing more capital to active job sites.
Completions Fell the Hardest
The steepest year-over-year decline in the report was in completions, which dropped 16.8% to 1,212,000 units, per the Census data. Completions lag starts by months, so July’s weak completion numbers largely reflect a slowdown in projects that broke ground in late 2025 and earlier this year, a pipeline effect that will keep completions depressed for a while even if new activity picks back up.
Where the Permit Growth Is Concentrated
The South issued 755,000 annualized permits in July, more than half the national total, with 529,000 of those for single-family homes, according to the same report. The West followed with 309,000 permits, the Midwest with 228,000, and the Northeast with 151,000. Single-family permits nationally rose just 1.1% year-over-year, a modest gain compared with the multi-family segment, where 490,000 annualized permits reflect builders continuing to bet on apartment and condo demand even as single-family activity cools.
Taken together, the July figures describe a construction sector in transition: builders are still filing for future projects at a healthy clip, but they’re breaking less ground and finishing fewer homes than they were a year ago, a combination that could either signal a temporary pause before a rebound or the early stage of a longer slowdown, depending on how permit activity converts into actual starts over the coming months.