New residential construction rose over 5% in July, reaching an annualized rate of 1.4 million homes, with multifamily housing starts seeing a 10% gain. However, construction firms reported weak future plans, as building permits dropped nearly 3% to an annualized rate of 1.35 million, about 6% lower than the same time last year. The housing sector faces challenges from high interest rates, rising material costs due to tariffs, and a reduced labor pool from immigration restrictions, contributing to a sluggish market expected to impact broader economic growth.
New residential construction rose more than 5% in July to an annualized rate of 1.4 million homes.
Building permits fell almost 3% in July to an annualized rate of 1.35 million, roughly 6% below the pace seen in the same period a year ago.
There are two other factors weighing on housing: rising materials costs due to tariffs, and a crackdown on immigration that is shrinking the sector's labor pool.
Housing has been in recession since the Fed started raising rates in 2022 and we have not yet seen any green shoots.
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