Senior Economist Commentary: August Housing Starts – Rebound May Signal More Improvement

First American Senior Economist Sam Williamson comments on the Housing Starts Report for August: 

August Housing Starts – Rebound brings housing starts back from July low point, may signal more improvement in months ahead

• “Housing starts in August rebounded from July’s dip to the lowest level since May 2020. The monthly increase was driven by a 16 percent jump in single-family starts to a seasonally adjusted annual rate of 992,000.”

• “Single-family permits, a leading indicator of future starts, also rebounded, but remain down 6% from their recent 2024 peak. The increase in August follows several months of declines, perhaps pointing to a stabilization in single-family permits.”

• “The August report aligns with homebuilder sentiment, which rebounded this month from the lowest level since December 2023 reached last month in the face of elevated mortgage rates.”

• “With mortgage rates expected to gradually decline in the coming months as the Fed begins cutting rates, buyer interest and builder sentiment are likely to improve, potentially leading to improving housing starts and permits in the months ahead, a positive sign for housing supply.”