The 940,000 single-family housing starts are the lowest total since there were 861,000 in July 2024. It’s only the second month with a total below one million since August 2024.
Odeta Kushi, First America deputy chief economist, notes that the total number of privately owned housing starts was expected to be 1.45 million. She said uncertainty caused by the Trump administration’s tariffs is leading to the lackluster numbers.
“Builders pull back more than expected amid rising tariff uncertainty, as housing starts slump well below consensus expectations,” Kushi said. “Builders face persistent supply-side and affordability challenges, from higher material costs to a shortage of skilled labor. Residential building material costs are still more than 40% higher than pre-pandemic levels, making construction more expensive.”
Kushi is concerned that if the tariffs continue, the price of new homes will continue to rise.
“Recent tariff actions could push costs even higher, with builders estimating an additional $10,900 per home,” she said. “If these tariffs persist, builders will have no choice but to pass on the costs to consumers, who are already struggling with housing affordability.”
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