In July, the number of new housing starts in the United States rose to a five-month high, with the construction of multi-family homes leading the growth.

Thanks to the strong construction of multi-family residential buildings in the past two years, the number of new housing starts in the United States in July reached a five-month high. Data released on Tuesday showed that the annualized rate of new home construction in July reached 5.2%, higher than the market's expected -1.7% and the previous value of 4.6%; the total annualized number of new home starts in July reached 1.428 million units, also higher than the market's expected 1.29 million units and the previous value of 1.321 million units. Specifically, the volatile construction of multi-family residential buildings increased by nearly 10%, the fastest growth since mid-2023. The construction of single-family homes, which accounts for the largest share of residential construction, increased by 2.8%, with an annualized total of 939,000 units. Although new home construction in July has rebounded somewhat, American homebuilders have become more cautious in the past two years as doubling mortgage rates have made many homeowners unwilling to move, suppressing demand and leading to the highest level of new home supply since 2007. While builders have lowered prices and offered generous incentives, residential construction has been a drag on economic growth in four of the past five quarters. The report shows that the number of single-family homes under construction in the United States in July reached its lowest level since February 2021. Builders have signaled a slowdown in construction, especially for "speculative housing" (housing that is built without a contract). These new home construction data will help economists adjust their forecasts for third-quarter gross domestic product (GDP). Prior to the latest construction report, the Atlanta Fed's GDPNow forecast had virtually no contribution from residential investment to the economy. In addition, building permits, which serve as a leading indicator for future construction, decreased by 2.8% in July, with an annualized total of 1.35 million units, the lowest since June 2020. Single-family home permits increased for the first time since February, while permits for multi-family projects declined. It is worth noting that new home construction data itself is highly volatile. The U.S. government report shows that within a 90% confidence interval, monthly variations may range from a decrease of 9.5% to an increase of 19.9%. The National Association of Realtors released data on July existing home sales on Thursday, providing the latest observations on the resale market.