Housing starts in July came in well below expectations, as single-family starts dropped a sharp 89,000 month-over-month to just 808,000. That is the lowest number of starts since late 2022. The figure reflects the affordability challenges we’re all well aware of
Multifamily starts are very volatile month to month. They totaled 431,000 versus 518,000 in June, 293,000 in May, and 500,000 in April.
Single Family Housing Starts
As for permits, the precursor to an eventual start, they rebounded for single-family by 22,000 after falling by 20,000 in June. Multifamily permits rose by 47,000 to 549,000.
I’m guessing that most of those multifamily permits are in the coastal markets (I’m seeing it firsthand in NJ). Rents keep rising as starts in the Sunbelt have fallen sharply. That follows a period where we had a flood of supply over the span of a few years.
Bottom line: The rental market will be the beneficiary – and I expect rents to be rising again in late 2026 and in 2027 as the excess Sunbelt supply gets absorbed.
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