US Housing Market Slows: July 2024 Building Permits and Starts Drop on Rising Rates, Uncertainty

Start of housing construction

Housing starts were down more sharply, plunging to a SAAR level of 1.238 million in July, down 6.8% from the revised June estimate of 1.329 million and down significantly from the July 2023 rate of 1.473 million. Single-family home starts were particularly hard hit, falling 14.1% from June to a rate of 851,000. The rate for units in buildings with five or more units fell to 363,000.

Completed housing

Despite the slowdown in building permits and housing starts, housing completions were solid in July, with an annual rate of 1.529 million units. That’s down 9.8% from June’s revised rate of 1.696 million, but up 13.8% from July 2023. Single-family home completions edged up 0.5% to 1.054 million, while unit completions in buildings with five or more units reached 473,000.

Market forecast

The decline in building permits and housing starts suggests a bearish outlook for the U.S. residential construction market in the near term. Rising interest rates, combined with economic uncertainty, are likely contributing to the decline in construction activity. Traders should prepare for potential weakness in housing stocks and residential construction-related industries.