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With a buyer’s market on the horizon, developers continue to pull back on building single-family homes.
Home builders started construction on 890,000 units in August, down 12 percent from the same time in 2024, according to seasonally adjusted construction starts data from the U.S. Census Bureau.
Every U.S. region — the Northeast, the Midwest, the South and the West — saw new single-family construction fall year over year in August. The West saw starts plunge the most, by nearly 16 percent.
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The drop in the new construction of single-family properties comes as the country faces a shift toward a buyer’s market, an affordability crisis and growing inventory. Builders wrapped up constructing about 6 percent more single-family homes across the U.S. in August than they had the year before, delivering 1.1 million houses.
Builder confidence in the market for single-family properties held steady in September from August after a month-over-month drop, according to a recent survey from the National Association of Home Builders. Thirty-nine percent of builders also said they slashed prices in September, 2 percentage points higher compared to the previous month.
It also doesn’t appear that this decline in single-family home construction will shift soon, particularly with elevated borrowing costs, rising labor prices and tariff uncertainty hampering construction.
Continuing a trend over the past year, local building departments greenlit construction of almost 12 percent fewer houses — 856,000 — in August versus the year before. The West again reported the biggest annual drop, of 21 percent — this time in authorized permits. Only the Midwest saw single-family home permits rise.
Meanwhile, construction of multifamily properties — those with at least five units — is on the rise. Developers started building 403,000 multifamily properties in August, a nearly 16 percent year-over-year spike. This comes as builders finished 503,000 of these properties last month, almost 29 percent fewer than the same time last year.