New-home construction rose again in July thanks to another healthy increase in the multifamily sector; single-family starts managed a small increase.  

Overall new-home construction, which includes single-family homes as well as apartments and condominiums, rose 5.2% month over month to a seasonally adjusted annual rate of 1,428,000 units from 1,358,000 units in June, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported. Year over year, the rate was up 12.9% from the July 2024 rate of 1,265,000.    

Multifamily starts jumped 11.6% month over month and 27.4% year over year to 470,000, while single-family starts rose 2.8% month over month and 7.8% year over year to 939,000.  

“The monthly increase in housing starts and permits is a welcome development, but one data point doesn’t make a trend,” First American Deputy Chief Economist Odeta Kushi said. “Sustained gains are needed to demonstrate continued progress in single-family homebuilding. The housing market remains structurally undersupplied, and we need more hammers at work to build the homes that are still in short supply.” 

Overall housing permits declined 2.8% on a monthly basis and 5.7% on a yearly one to 1,354,000. Permits for single-family homes rose 0.5% month over month but fell 7.9% year over year to 870,000, while multifamily permits were down 9.9% month over month and 1.8% year over year, at 430,000. 

“Despite a modest uptick after a four-month streak of declines, single-family permits — a leading indicator of future construction — remain near their lowest level since March 2023, signaling continued weakness in the sector,” Kushi said. “Builders continue to face persistent supply-side challenges and intensifying competition from a growing inventory of resale homes. Without meaningful improvements in affordability, the outlook for the single-family sector remains constrained.” 

New-home inventory remains elevated at 9.8 months compared to the pre-pandemic five-year average of 5.6 months, Kushi noted.