July 2025 Housing Report Shows Growth in Southern Home Construction While Other Regions Experience Declines

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Fresh data from the U.S. Census Bureau and HUD shows that single-family housing starts rose 2.8% in July from the previous month, reaching an annualized pace of 939,000 units. That figure also reflects a 7.8% increase compared with a year earlier. The surprise gain came entirely from the South, where construction climbed 13% from June and 22% from last July.

Regional Differences in Building Trends

The Midwest, Northeast, and West all posted monthly and annual declines in single-family starts. For Orange County residents, this is particularly important: when construction lags in our region, limited supply often fuels competition and rising home prices. Meanwhile, the South continues to draw builders thanks to affordability, available land, and population growth.

Permits and the Construction Pipeline

Permits for single-family homes, a measure of future building activity, rose 0.5% nationally in July but were down nearly 8% compared to a year ago. The overall pipeline remains sluggish, with 621,000 single-family homes currently under construction—1% lower than June and nearly 4% below last year. This shows that while July’s numbers offered some optimism, long-term momentum is still under pressure.

Builder Confidence and Market Headwinds

Despite the July boost, builder sentiment remains cautious. Recent surveys revealed that 66% of builders used sales incentives in August, the highest level in five years. About 37% reported cutting prices, averaging a 5% reduction. “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,” explained NAHB Chairman Buddy Hughes.

Multifamily Construction Gains Ground

Multifamily housing starts also jumped in July, rising nearly 10% from June and 24% from a year earlier. After bottoming out at a decade low in 2024, multifamily construction has rebounded as affordability challenges keep many families in the rental market longer than expected. Together, single-family and multifamily construction starts increased by 5.2% in July, reaching an annualized rate of 1.43 million units.

Bottomline

The July housing starts report shows how much regional and product type differences matter. Orange County’s tight supply and strong demand continue to put pressure on buyers and sellers alike, even when national construction numbers look more encouraging. If you’re thinking of making a move in our competitive market, Whitestone Real Estate is here to help you navigate with clarity and confidence. Let’s connect and turn these insights into your advantage.

Reference: Griffith, K. (2025, August 19). Single-family home construction rises unexpectedly with boost from the South. Realtor.com.