United States, September 18, 2025
News Summary
Housing starts in the US have plummeted to 1.31 million, reflecting an 8.5% drop from July and a 6% annual decrease. The decline is predominantly driven by a decrease in single-family units, with permits also falling. Despite a drop in mortgage rates to 6.35%, economic uncertainty continues to hinder market recovery. Additionally, the job market is struggling, with fewer jobs added than expected and an increasing number of unsold homes. The overall outlook for the housing market remains bleak.
US Housing Starts See Significant Decline Amid Economic Concerns
The construction landscape in the United States took a sharp turn for the worse in August, as housing starts plunged to a seasonally adjusted annual rate of 1.31 million. This figure represents an alarming 8.5% drop from July’s rate of 1.43 million, and a 6% decline compared to the 1.39 million starts recorded in August 2024.
In addition to housing starts, building permits have also shown troubling signs, falling to 1.31 million, which is down by 3.7% from 1.36 million in July and a significant 11.1% decrease from 1.48 million in August last year. These numbers indicate an overall slowdown in the housing sector, as builders become increasingly cautious in an unstable economic climate.
Single-Family Construction Suffering
Particularly concerning for the market is the decline in single-family housing starts, which dropped by 7.0% month-over-month to a rate of 890,000 units. Furthermore, permits for future single-family construction have also decreased by 2.2% to 856,000 units. This downturn paints a picture of dwindling confidence among builders as they face high unsold inventory.
The broader housing starts figure, which includes both single-family and multi-family units, also fell to an annual rate of 1.307 million. This represents the same 8.5% decrease from the previous month and a 6.0% year-over-year decline, indicating a widespread trend in the industry.
Mortgage Rates and Their Impact
Interestingly, the average 30-year fixed mortgage rate has dropped to 6.35%, marking its lowest level in 11 months and a noticeable decrease from rates exceeding 7% in January. However, this reduction has not significantly revitalized the housing market, primarily due to heightened economic uncertainty that looms over potential homebuyers.
The economic situation has led to expectations that the Federal Reserve may cut rates by 25 basis points to address the job market’s challenges. Earlier attempts to pause rate cuts were primarily focused on controlling inflation. Yet, analysts caution that merely lowering rates may not solve the pressing issues of slow job growth and rising unemployment.
Increasing Inventory and Unsold Homes
Recent data has underscored an alarming accumulation of unsold homes, with properties now averaging 27 days on the market—roughly a week longer than in the previous year. This has been exacerbated by a 7.3% decline in new listings from July, reaching the lowest level since tracking began. The market behavior is striking, as 57% more homes were removed from listings in July compared to the previous year, suggesting caution among sellers amidst economic instability.
For the first time in years, more homes were taken off the market unsold than were newly listed, particularly affecting the South and West regions. This situation illustrates a disconcerting trend for both buyers and sellers alike.
Job Market Challenges
The labor market is also demonstrating signs of weakness. Only 22,000 jobs were added in August, a stark contrast to the expected 76,500. As a result, unemployment slightly rose to 4.3% from 4.2%, compounding the challenges faced by the housing sector.
With these negative indicators, the housing market is left grappling with significant challenges, urging policymakers to consider mechanisms to invigorate the industry amidst high unsold inventories and a weakening job market.
FAQs
What was the rate of housing starts in August?
Housing starts in August dropped to a seasonally adjusted annual rate of 1.31 million, marking an 8.5% decrease from July.
How did building permits change in August?
Building permits fell to 1.31 million, down from 1.36 million in July, which is a 3.7% decrease and an 11.1% decrease year-over-year.
What is the current average mortgage rate?
The average 30-year fixed mortgage rate fell to 6.35%, the lowest in 11 months and down from over 7% in January.
How many jobs were added in August?
Only 22,000 jobs were added in August, falling short of expectations of 76,500.
Deeper Dive: News & Info About This Topic
Additional Resources
- Reuters: US Single-Family Housing Starts Near 2.12-Year Lows
- Mortgage Professional America: US Housing Starts and Permits Tumble
- Capital Brief: US Housing Starts and Building Permits Drop
- Bloomberg: US Housing Starts Fall to Lowest Since May
- Seeking Alpha: Housing Starts and Building Permits Weaken
- Wikipedia: Housing in the United States
- Google Search: US Housing Market
- Google Scholar: Housing Market Trends 2025
- Encyclopedia Britannica: Real Estate
- Google News: US Housing Market 2025
Author: Construction CA News
CALIFORNIA STAFF WRITER The CALIFORNIA STAFF WRITER represents the experienced team at constructioncanews.com, your go-to source for actionable local news and information in California and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rose Parade, Coachella, Comic-Con, and the California State Fair. Our coverage extends to key organizations like the California Building Industry Association and Associated General Contractors of California, plus leading businesses in technology and entertainment that power the local economy such as Apple and Alphabet. As part of the broader network, including constructionnynews.com, constructiontxnews.com, and constructionflnews.com, we provide comprehensive, credible insights into the dynamic landscape across multiple states.
