Single-Family Housing Starts Rise 7.6 Percent in August
Builder confidence hits a 2026 low as rising costs and labor shortages pressure the sector.
Single-family housing starts increased by 7.6 percent in August compared to the previous month. The seasonally adjusted annualized rate reached 918,000 units. This growth occurred despite a 2.6 percent drop in overall housing starts.
Builder confidence fell to 32 in September, marking a three-point decline. This is the lowest level recorded for this time of year since 2025. The National Association of Home Builders index has remained below 50 for more than two years.
Cost pressures limit industry momentum
Material costs and energy prices remain elevated. Labor shortages continue to constrain site operations. Mark Fleming of First American states that the industry needs relief from these costs to regain momentum. Affordability issues caused by high mortgage rates also suppress consumer demand.
Builders cut prices to attract buyers
Thirty-eight percent of builders reduced prices in September. This is an increase from 35 percent in August. The average price cut held steady at 6 percent. Two-thirds of firms reported offering financial incentives to entice buyers.
Robert Dietz of the NAHB notes that buyer traffic has weakened. Rising mortgage rates are the primary driver of this decline. Increased immigration enforcement is also discouraging legal workers from reporting to job sites in some markets.
Data sources and market outlook
The U.S. Census Bureau provided the August housing start data. GN auto markets/housing: housing prices tracks these trends alongside broader economic indicators. Permits are trending lower, suggesting a tighter pipeline for future construction.
