Apartment development slowdown weighs on US housing starts

Article originally posted on CoStar on August 18, 2026

Multifamily groundbreakings fell 15.6% in July as builders grapple with uncertainty

U.S. housing starts are falling as economic uncertainty continues to weigh on multifamily and single-family homebuilding.

Seasonally adjusted groundbreakings totaled a 1.239 million annual pace in July, down 12.4% from the revised June figure and 13.5% lower than July 2025, according to a report Tuesday from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

July’s multifamily starts totaled 421,000, a decline of 15.6% from June and of 7.1% from July 2025.

Single-family starts totaled 808,000, a drop of 9.9% from June and of 15.7% from a year earlier. It’s the lowest reading since November 2022.

On Monday, a National Association of Home Builders/Wells Fargo monthly builder sentiment index registered a negative reading for the 28th consecutive month, underscoring widespread concerns about sales and would-be buyer traffic.

Elevated mortgage rates have made consumers more cautious, while rising prices for materials, gas and diesel are driving up construction costs, according to Bill Owens, chairman of the NAHB trade group.

“These challenges are making it increasingly difficult for builders to deliver homes at prices that buyers can afford,” Owens said in a statement.

Housing completions also fell in July. But the report did provide a sliver of optimism, with single-family permits — a sign of future construction — rising 2.5% from June to 894,000.

The permits data suggests there may be more momentum for single-family homebuilding than analysts believe, according to Nancy Vanden Houten, lead economist at Oxford Economics. Still, the research firm said it expects little growth in starts until the back end of 2027, though it noted even that forecast could be optimistic given the recent upticks in mortgage rates.

Meanwhile, Stephen Stanley, chief U.S. economist at Santander Bank, offered a positive spin on the weak July single-family starts.

“Builders need to be culling their inventories anyway, so better to rip the Band-Aid off quickly and slow things down for a month or two than to take half measures and never get ahead of the situation, which is, for the most part, the mode that builders have been in for the past few years,” he said in a statement.