Boosted by a surge in the multifamily sector, US housing starts saw a sizeable jump in July, posting the highest total of starts since February. Housing completions were also up in July, while building permits were down.
According to the numbers released by the US Census Bureau on Tuesday, overall housing starts totaled 1.428 million in July, up 5.2% from June and 12.9% above July 2024. It was the highest number of overall starts since February’s 1.490 million.
The sector was paced by buildings with five or more units, which had 470,000 starts in July, up from 421,000 in June. This is the highest total of multifamily starts in more than a year.
Single-family housing starts were also up, coming in at 939,000 for July. This reflects a 2.8% increase month over month; however, totals are still low compared to most months over the last year. Only June 2025, with 913,000 single-family starts, and July 2024, at 871,000, had a lower total over the last year.
Odeta Kushi, deputy chief economist at First American, said the single-family housing starts numbers are concerning.
“Despite a modest uptick after four-month streak of declines, single-family permits—a leading indicator of future construction—remain near their lowest level since March 2023, signaling continued weakness in the sector,” Kushi said.
Housing completions also higher
Privately-owned housing completions also saw a bump in July, increasing 6.0% month-over-month to 1.415 million. However, it was 13.5% lower than the same time last year.
Single-family completions paced the way, increasing by 11.6% from June to 1.022 million. Multifamily completions were down 2.8% from June, falling to 385,000 from 396,000 in June. However, it was down 28.8% from July 2024.
The multifamily total is the second-lowest total over the last year, and it is the fourth straight month of declines.
This aligns with comments from Jeff Brown, founder and CEO of T2 Capital Management. He told Mortgage Professional America that the outlook in the CRE space has been a little more challenging lately.
“I saw a great headline recently, and it was pervasive for the commercial real estate industry as a whole, but I think it really applies to multifamily space, and that is cloudy with a chance of sunshine,” Brown said. “We’re all used to seeing the forecast of sun with a chance of clouds. This is just the inverse right now.”
Building permits tumble
Where those clouds show up are privately-owned housing units authorized by building permits, which fell 2.8% month over month to 1.354 million. That total is also down 5.7% from July 2024.
Single-family building permits were mostly flat in July, checking in at 870,000. July’s total was up 0.5% from 866,000 in June.
“The monthly increase in housing starts and permits is a welcome development, but one data point doesn’t make a trend," Kushi said. "Sustained gains are needed to demonstrate continued progress in single-family homebuilding. The housing market remains structurally undersupplied, and we need more hammers at work to build the homes that are still in short supply.”
Multifamily permits fell to 430,000 in the month, down 9.9% from June and 1.8% from July 2024.
This is one of the factors that led to Monday’s builder confidence numbers. The latest index from the National Association of Home Builders (NAHB) showed a one-point decline to 32 in August. It was the 16th straight month that builder sentiment remained in negative territory.
Kushi said without improvement in affordability, the construction market may remain challenged.
“Builders continue to face persistent supply-side challenges and intensifying competition from a growing inventory of resale homes," she said. "Without meaningful improvements in affordability, the outlook for the single-family sector remains constrained. In June, the months’ supply of new homes rose to 9.8 months—well above the pre-pandemic five-year average of 5.6 months.
"At the same time, existing-home supply is also trending higher. Rising inventories, coupled with persistent supply-side and affordability challenges, are creating headwinds for the single-family sector.”
She noted there is a difference between short-term and long-term housing shortages.
“It’s important to distinguish between structural undersupply and cyclical inventory dynamics," Kushi said. "Structural undersupply refers to a long-term shortage of housing relative to the number of households seeking homes. In contrast, elevated unsold inventory is a short-term, cyclical phenomenon that reflects the current balance between buyers and sellers—often influenced by high mortgage rates, affordability constraints, and softer demand.”