Written by: Internal Analysis & Opinion Writers
U.S. housing starts surged unexpectedly in July, rising 5.2% to a seasonally adjusted annual rate of 1.428 million units—a five‑month high and 12.9% above the same month last year.
The surge was driven primarily by a jump in multifamily construction. Start activity for buildings housing five or more units climbed 11.6%, signaling renewed investor interest in rental housing and helping offset a more modest single-family gain of 2.8%.
Despite these promising numbers, the broader outlook remains cautious. Building permits fell 2.8% to 1.354 million, suggesting that future activity may slow even amid current momentum.
Odeta Kushi, deputy chief economist at First American, welcomed the improved construction figures but emphasized that sustained gains are essential before declaring a recovery in single-family building.
Builder sentiment, as measured by the Housing Market Index, slipped further into negative territory in August—marking the 16th consecutive month of contraction. At the same time, 66% of builders reported offering sales incentives, the highest share since the post‑COVID homebuying boom.
Kushi noted that affordability challenges and heightened resale competition are continuing to weigh on the single-family sector and limiting new construction elsewhere.
