U.S. single-family housing starts rebound amid inventory growth

U.S. single-family housing starts saw a rebound in August, increasing 7.6% to a seasonally adjusted annual rate of 918,000 units. However, overall housing starts fell 2.6% to an annual rate of 1.28 million units, driven by a 21.7% decline in the multifamily sector.

New home inventory levels have risen, reaching approximately 9.6 months of supply in July. This stands in stark contrast to the existing home market, which maintains roughly 4.9 months of supply. This divergence is attributed to builders carrying finished inventory while existing homeowners remain reluctant to sell due to low mortgage rates held from previous years.

Industry analysts note that high mortgage rates, rising construction financing costs, and general economic uncertainty continue to impact the market. While single-family starts increased compared to the previous year, year-to-date production remains down 4.7% as builders face labor shortages and rising costs.