Based on U.S. Census Bureau data, privately owned housing starts in August were at a seasonally adjusted annual rate of 1.275 million, notably below market expectations of 1.320 million for the month. The August data point is -2.6% below the upwardly revised July reading of 1.309 million and is -1.3% below the August 2025 rate of 1.291 million. Housing starts have been on a downward trajectory since peaking in 2022. However, single-unit starts increased to 918,000, a growth of 7.6% from July’s reading, while houses in structures with five or more units decreased to 344,000, a -22.5% drop from July.
The ABA Office of the Chief Economist believes the August reading is consistent with a sluggish housing market challenged by affordability concerns, labor shortages and increasing input costs. Despite this, single-family home starts show some resilience and stabilization since April. Paired with the potential for continued elevated mortgage rates, banks may experience reduced demand for mortgages and construction loans.
