U.S. Housing Starts Fall 2.6% in August as Building Permits Drop 2.7%

U.S. residential construction softened in August, with housing starts falling 2.6% from the prior month and building permits declining 2.7%, according to new data from the Census Bureau and Department of Housing and Urban Development.

Privately owned housing starts ran at a seasonally adjusted annual rate of 1.275 million, down from a revised 1.309 million in July and 1.2% below the August 2025 rate. Building permits, a measure of projects authorized for future construction, fell to a 1.394 million annual rate from a revised 1.433 million in July, though permits were still 3.5% above their year-earlier level.

The headline decline in starts did not extend to single-family construction. Single-family starts rose 7.6% to a 918,000 annual rate, while starts in buildings with five units or more were 344,000. That split shows that the weakness in the overall figure was concentrated outside the single-family segment.

Overall starts fell, but the monthly estimate carries a wide margin

The August New Residential Construction report put total housing starts at 1.275 million on a seasonally adjusted annual basis. The reported 2.6% monthly decline came with a sampling margin of plus or minus 12.0 percentage points. Because that range includes zero, the Census Bureau does not treat the month-to-month change in total starts as statistically conclusive.

The same caution applies to the 1.2% year-over-year decline in total starts, which carried a margin of plus or minus 10.8 percentage points. Monthly housing construction figures can be volatile, particularly when multifamily projects enter or leave the survey, so the direction of a single month’s estimate should be read alongside its uncertainty and the underlying composition.

Single-family starts moved in the opposite direction, rising to 918,000 from a revised 853,000 in July. That 7.6% increase also had a relatively wide sampling margin of plus or minus 14.0 percentage points, meaning the estimated gain itself is not statistically definitive. Even so, the level was stronger than July’s estimate and accounted for a larger share of total starts in August.

Multifamily activity was weaker. Starts for units in buildings with five or more units came in at an annual rate of 344,000. The contrast between single-family and multifamily construction helps explain how the nationwide total could decline even with a higher estimate for detached and attached one-unit homes.

Permits weakened across the headline and single-family measures

Building permits fell to a 1.394 million annual rate in August, 2.7% below July’s revised 1.433 million pace. Unlike starts, the permit data pointed to softer authorization activity in the single-family market as well. Single-family permits declined 1.8% to 878,000 from a revised 894,000.

Permits for units in buildings with five or more units were at a 467,000 annual rate. The total permits figure remained 3.5% above August 2025, so the monthly decline did not erase the year-over-year increase in authorized construction.

Permits and starts measure different stages of the building pipeline. A permit indicates that a project has been authorized in a permit-issuing area, while a housing start is recorded when construction begins. The two series therefore do not have to move together in any particular month. A project can be permitted and begin later, and some starts occur outside areas where permits are required.

The August pattern suggests that construction already moving into the start phase held up better in the single-family segment than the forward authorization data. Whether that pattern continues will depend on subsequent monthly reports, including revisions to preliminary permit estimates.

Completions fell sharply in August

Housing completions provided the weakest reading in the release. Privately owned completions fell 11.9% from July to a seasonally adjusted annual rate of 1.128 million. That drop was larger than its plus or minus 9.7 percentage-point margin, making it more statistically distinct than the monthly decline reported for total starts.

Completions were also 27.1% below the August 2025 rate of 1.548 million. Single-family completions fell 10.4% from July to an annual rate of 816,000, while completions in buildings with five units or more were at a 302,000 pace.

The completion data matter because they reflect homes reaching the end of the construction process rather than projects just being authorized or started. A lower monthly completion rate can affect the pace at which newly built housing becomes available, although one month’s estimate does not by itself establish a lasting change in supply.

The three major measures therefore gave different signals in August. Total starts and permits declined, single-family starts increased, and completions fell more sharply. That makes the composition of the report more informative than the headline percentages alone.

What the August report says about the construction pipeline

The Census Bureau’s New Residential Construction program covers new privately owned housing units and combines data from the Building Permits Survey and Survey of Construction. The published rates are seasonally adjusted annual rates, meaning they represent the pace that would result if the month’s adjusted activity continued for a full year. They are not counts of homes actually started, permitted or completed during August.

For the near-term construction pipeline, the 878,000 single-family permit rate is a useful figure to watch because it sits below the 918,000 single-family start rate reported for the month. That does not imply starts must fall next, but it shows that authorizations did not strengthen alongside August’s rise in single-family groundbreaking.

Total permits being 3.5% above a year earlier offers a different comparison. The month-to-month picture weakened, while the level of authorized housing remained higher than in August 2025. At the same time, total starts were slightly lower than a year earlier and completions were substantially lower.

The next New Residential Construction report, covering September, is scheduled for October 20, 2026. Before then, revised August building permit estimates are scheduled for September 24. Those revisions will provide a clearer view of whether the decline in authorizations remains close to the preliminary 2.7% estimate.