How Single-Family Housing and Inflation Data Impact Our Thinking and Strategy

As you can see in the charts below, mortgage rates have been in a recent downward trend, reaching their lowest point since October 2024. As of August 14, 2025, the average 30-year fixed mortgage rate was 6.58%, according to Freddie Mac data, while the average 30-year fixed jumbo mortgage rate was 6.76%.

While we’ve heard chatter among some of our realtor contacts that those recent moves lower have spurred some renewed interest in the housing market, you wouldn't know it by looking at today’s July Housing Starts & Building permits report. Total July housing starts came in at 1.428 million, up from 1.358 million in June and the expected 1.29 million, but reading through the details of the report, we find the larger driver of the upside surprise was multi-family housing starts, not those for single-family. While single-family housing starts moved up to 938,000 in July from 913,000 in June, multi-family housing starts climbed to 489,000 from 445,000 in June.

Going one step further, we saw further weakening in single-family housing units authorized but not started to 139,000, the lowest level seen in the trailing 12-month data. Single-family housing permits remained weak at 870,000 units, up modestly from 866,000 in June but still the second lowest reading in the last 12 months. Finally, the number of single-family housing units under construction fell 1% sequentially, to 621,000 in July, the lowest seasonally adjusted level in the last 12 months.

We will want to pay close attention to next week’s July New Home Sales report and what it says about single-family sales. Given the lower-than-expected sales of single-family new homes in June — 627,000 units vs. the market forecast of 650,000 units — we saw the number of unsold homes on the market rise to its highest level since October 2007. That figure equates to 9.8 months to sell all the new houses available, making it the highest reading in over a year.

If we see the number of unsold homes move higher in July, it will help explain the declines we discussed above for single-family authorized but not sold homes, permits, and units under construction. It would also suggest we could see another decline in the August data.

As we’ve discussed with last week’s hotter-than-expected July PPI and July core CPI readings, the next inflation-fighting data point will be found in Thursday’s Flash August PMI report. Comments this morning from Home Depot HD that it will be raising prices in some categories due to tariffs, as well as reports that major U.S. producers of electrical wire are raising prices, are the latest indications that we are likely to see August PMI price data remain at elevated levels. To us, this reinforces the likelihood that Fed Chair Powell’s comments on Friday at Jackson Hole could skew more hawkish, if he opts to make any about monetary policy.

That potential and what we could see in next week’s July New Home sales report is keeping us on the sidelines when it comes to homebuilders and the shares of Builders FirstSource BLDR.

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At the time of publication, TheStreet Pro Portfolio had no positions in any securities mentioned.