United States, September 18, 2025
News Summary
Housing starts in the US have plummeted to 1.31 million, reflecting an 8.5% drop from July and a 6% annual decrease. The decline is predominantly driven by a decrease in single-family units, with permits also falling. Despite a drop in mortgage rates to 6.35%, economic uncertainty continues to hinder market recovery. Additionally, the job market is struggling, with fewer jobs added than expected and an increasing number of unsold homes. The overall outlook for the housing market remains bleak.
US Housing Starts Plummet to 1.31 Million Amid Economic Uncertainty and High Unsold Inventory
Housing starts in August have seen a significant decline, dropping to a seasonally adjusted annual rate of 1.31 million. This represents an 8.5% decrease from July’s rate of 1.43 million. Year-over-year, the situation is similarly grim, with housing starts decreasing 6% from 1.39 million in August 2024.
In addition to housing starts, building permits have also fallen, decreasing to 1.31 million in August from 1.36 million in July, marking a 3.7% drop. Comparatively, permits also showed a steep 11.1% decline from 1.48 million in August last year.
Single-Family Housing Starts Hit Hard
The decline in housing starts is primarily driven by a downturn in single-family units, which saw a 7.0% drop month-over-month, bringing the rate to 890,000 units. Furthermore, permits for future single-family construction also fell, down 2.2% to 856,000 units.
The overall housing starts figure, inclusive of multi-family units, reflects a broader downtrend, plummeting 8.5% month-over-month to an annual rate of 1.307 million. This unexpected decrease missed consensus estimates and displays a 6.0% year-over-year decline.
Mortgage Rates and Economic Context
The average rate for a 30-year fixed mortgage has recently dropped to 6.35%, marking the lowest rate in 11 months and a decrease from over 7% in January. However, this decline in mortgage rates has not significantly revived the housing market, largely due to ongoing economic uncertainty.
Amid these challenges, experts anticipate that the Federal Reserve may consider cutting interest rates by 25 basis points to stimulate the job market. This move comes after a previous pause related to concerns over inflation. Nonetheless, analysts highlight that merely lower interest rates may not effectively tackle issues related to slow job growth and rising unemployment.
Surge in Unsold Homes and Job Market Woes
Recent data indicates a concerning accumulation of unsold homes, with properties now averaging 27 days on the market—approximately a week longer than the same period last year. Compounding this issue, new listings have decreased by 7.3% from July, hitting the lowest level since data tracking began, according to Zillow.
In July, there was a notable shift as 57% more homes were removed from the market compared to the previous year. For the first time in several years, more homes exited the market unsold than were newly listed, particularly affecting the South and West regions.
The job market, too, is experiencing a downturn, with only 22,000 jobs added in August, which falls short of the anticipated 76,500. In a related trend, the unemployment rate rose slightly to 4.3% from 4.2%.
Conclusion
The latest data paints a troubling picture for the US housing market. With a significant drop in both housing starts and building permits, coupled with an increasing number of unsold homes and a slowing job market, the outlook remains uncertain. As the economic landscape continues to evolve, it remains to be seen how these factors will influence the housing sector in the coming months.
Deeper Dive: News & Info About This Topic
Additional Resources
- Reuters: US Single-Family Housing Starts Near 2.12-Year Lows
- Mortgage Professional America: US Housing Starts and Permits Tumble
- Capital Brief: US Housing Starts and Building Permits Drop
- Bloomberg: US Housing Starts Fall to Lowest Since May
- Seeking Alpha: Housing Starts and Building Permits Weaken
- Wikipedia: Housing in the United States
- Google Search: US Housing Market
- Google Scholar: Housing Market Trends 2025
- Encyclopedia Britannica: Real Estate
- Google News: US Housing Market 2025
Author: Construction FL News
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