US Housing Starts Plummet 12.4% in July

U.S. housing starts plummeted 12.4% in July to a seasonally adjusted annual rate of 1.239 million units, far exceeding economist expectations of a 5.4% to 5.9% decline. Data from the U.S. Census Bureau and the Department of Housing and Urban Development show a 13.5% decrease compared to July 2025. Single-family starts fell 9.9% to 808,000 units, marking the lowest level since November 2022, while multifamily starts dove 16.8%.

The slump was most severe in the Midwest, which saw a 27.6% drop, while the Northeast was the only region to report an increase. The Commerce Department and analysts attribute the decline to high borrowing costs, with the average 30-year fixed-rate mortgage at 6.77%, alongside steep material and land prices. Some reports also cite economic uncertainty stemming from a U.S.-led war with Iran.

Despite the drop in starts and a 9.1% decline in completions, building permits rose 5.0% to an annual rate of 1.443 million units, suggesting a potential rebound in August. However, the broader residential market remains strained; the National Association of Realtors reported a 2.3% monthly decline in contract signings for existing homes. Analysts suggest this weak data reflects low business confidence and could negatively impact Republican prospects in the upcoming November midterm elections.