#Factoftheweek
What if a rebound in home construction doesn’t mean the housing market is recovering?
Single-family housing starts increased 7.6% in August to a seasonally adjusted annual rate of 918,000 units, according to the NAHB (National Assn. of Home Builders). That sounds encouraging—but builders are still facing significant challenges, with single-family production down 4.7% year to date.
NAHB says builders continue to contend with:
- Rising construction and financing costs
- Higher mortgage rates and affordability challenges
- Lot and labor shortages
- Ongoing economic uncertainty
- Cautious expectations for future construction
There are some signs of resilience. Single-family starts were 5.2% higher than August 2025, while single-family permits in the Midwest were up 2.9% year to date through August.
But the bigger picture remains complicated. Overall housing starts actually decreased 2.6% in August, and single-family permits fell 1.8% from July. NAHB notes declining permit activity suggests builders remain cautious about future construction.
For builders, developers, and housing professionals, the challenge is balancing demand for new homes with the economic conditions that determine whether those homes can be built—and whether buyers can afford them.