US housing starts and pending sales decline in July

The United States housing market faced significant contraction in July 2026, characterized by a sharp decline in housing starts and pending home sales. According to data from the U.S. Census Bureau and the Department of Housing and Urban Development, total privately-owned housing starts fell 12.4% from June to a seasonally adjusted annual rate of approximately 1.24 million units.

Single-family housing starts dropped 9.9% to an annual rate of 808,000, representing a 15.7% decrease compared to July 2025. The multifamily sector also saw a decline, with starts for buildings with five or more units falling 7.1% year-over-year. Housing completions also slowed, dropping 9.1% from June.

Industry experts from the National Association of Home Builders (NAHB) attribute these trends to elevated mortgage rates, rising construction costs, labor shortages, and general economic uncertainty. These factors have kept prospective buyers on the sidelines and increased the financial burden on builders.

In contrast to the decline in starts and sales, building permits showed signs of resilience. Total residential construction permits rose 5% in July to a seasonally adjusted annual rate of 1.443 million, suggesting a potential future uptick in construction activity.