U.S. Housing Starts Hit Lowest Point Since May

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New residential construction starts across the nation dipped again in August, falling to their lowest level since May. According to the Census Bureau and the Department of Housing and Urban Development, privately owned housing starts were recorded at a seasonally adjusted annual rate of 1,307,000—an 8.5 percent drop from July and 6 percent below August 2024.

Single-family housing starts registered at 890,000, down 7 percent from July. Multi-family projects also slowed, with construction for buildings of five or more units falling to 403,000.

Building Permits Continue to Fall

Permits are often viewed as a forward-looking indicator of housing supply, and August marked the fifth straight month of decline. A total of 1,312,000 permits were issued for privately owned housing units, a 3.7 percent decrease from July and an 11.1 percent dip compared to last year.

Single-family authorizations were slightly weaker at 856,000, while multi-family permits also remained subdued at 403,000.

Interest Rates and Market Impact

“The slowing housing starts and permits is one of the strongest arguments for additional rate cuts,” said Eric Teal, chief investment officer of Comerica Wealth Management. Still, many experts agree that more substantial changes in mortgage rates will be needed to spur momentum.

As of September 11, the average 30-year fixed-rate mortgage was 6.35 percent, down 15 basis points from the prior week. The Federal Reserve also announced a 25 basis-point cut to the federal funds rate, aiming to stimulate activity across the market.

Completions See a Small Boost

While new starts and permits declined, completions showed improvement. August completions reached 1,608,000, up 8.4 percent from July, although still lower year-over-year. Single-family completions rose to 1,090,000, while multi-family completions reached 503,000.

Homes Sitting Longer on the Market

National sales data points to shifting buyer and seller behavior. Homes are now averaging 27 days on the market—about a week longer than last year. High housing costs have kept many buyers cautious, while sellers are increasingly pulling listings.

Zillow noted that “buyers who can afford a home and have been waiting for the right moment should look closely at what’s available now.” Realtor.com also reported that in July, more homes were taken off the market unsold than were added, a rare reversal that has reshaped inventory expectations for the rest of 2025.

Bottomline

The national slowdown in housing starts, coupled with a dip in mortgage rates, signals a market in transition. For buyers, this could mean increased leverage as homes sit longer. For sellers, it highlights the importance of pricing strategically and timing the market wisely. If you’re considering buying or selling in Orange County, connect with Whitestone Real Estate—we’ll help you navigate shifting trends and seize opportunities in today’s evolving market.

Reference: Prenon, M. (2025, September 17). US housing starts in August fall to lowest since May. The Epoch Times.