The Daily Build: Missing a Low Bar – Single-Family Starts Weaker Than Expected

Research evidence excerpt

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18 Aug 2026 11:00:57 ET │ 9 pages

The Daily Build

Missing a Low Bar – Single-Family Starts Weaker Than Expected

CITI'S TAKE

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In our daily, we highlight items of interest for Homebuilders, Building

Products & Construction Materials investors:

July Housing Starts fell -12.4% M/M to 1.24mm (vs 1.34mm FactSet cons) per Census

data out this morning; the miss was driven by sharp declines in both single-family (9.9% M/M to 808k) and multifamily (-15.7% M/M to 421k) starts. July building

permits rose +5.0% M/M to 1.44mm (vs 1.38mm cons), with modest growth in

single-family permits (+2.5% M/M to 894k); however single-family permits remain

weak historically (5-year avg. 955k) and near multi-year lows (867k in August ’25).

Soft single-family activity aligns with tepid HMI data out yesterday, as well as recent

Homebuilder commentary (DHI, MTH recently cutting FY ’26 deliveries guidance).

We continue to model 2026 single-family starts falling -2% Y/Y as builders pull back

on spec starts and normalize their sales mix; this would make 2026 the fifth

consecutive year of falling housing starts. We view July data as in line to slightly

negative for Builders; while underlying demand remains weak and elevated

mortgage rates (30-year FRM 6.67%) keep buyers on the sidelines, homebuilders

are focusing on GM stability. We examine the release in more detail herein.

Anthony Pettinari AC

Bryan Burgmeier

Landry Moore

Separately, seasonally adjusted pending home sales fell -2.3% M/M in July (vs

FactSet cons +0.2%), per the NAR this morning; pending home sales in July serve as

a leading indicator for existing home sales in August. The NAR notes that

affordability pressures (high mortgage rates, higher median home prices) continue

to drive housing market softness, with “houses for sale sitting on the market longer”

as “fewer buyers are bidding above the asking price”. Sales fell most sharply in the

West (-4.7% M/M), followed by the South (-2.2% M/M), Northeast (-2.0% M/M), and

Midwest (-0.7% M/M). While elevated mortgage rates (peaked YTD in key summer

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