H
ousing permits, starts, and completions all declined in June as elevated interest rates and material costs persisted. Single-family home construction, once a bright spot in the slow real estate market, is now slowing down heading into the second half of the year. While overall housing construction edged up slightly in June, single-family construction faltered: permits dropped 8.4%, starts declined 10%, and completions fell 15.5%. This marks a significant downturn since December's strong finish.

    The slowdown can be attributed to elevated interest rates, rising inventories, and ongoing supply-side issues, according to Robert Dietz, chief economist at the National Association of Home Builders. The South region, previously a construction hotspot, is experiencing the biggest slowdown, but activity has picked up in the Midwest. Builders are hesitant to start new projects due to increased building costs, tariffs, and import taxes on Canadian lumber.

    Builders are feeling discouraged by economic and political conditions, with declining sentiment reflected in price cuts used as incentives to make sales. Odeta Kushi, deputy chief economist at First American, notes that price cuts have become necessary to offset affordability challenges. Lisa Sturtevant, chief economist at Bright MLS, believes construction won't pick up until consumers regain confidence in the economy.