Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTBy Lucia MutikaniFri, July 17, 2026 at 7:03 PM GMT+2 5 min readBy Lucia MutikaniWASHINGTON, July 17 (Reuters) - U.S. single-family homebuilding fell for a third straight month in June while permits for future construction dropped to the lowest level in 10 months, weighed down by higher mortgage rates and a glut of unsold new homes on the market.Homebuilding is also being constrained by rising costs for land and materials. Builders and economists said it would take a while for the housing market to benefit from a bipartisan housing affordability legislation recently passed by the U.S. Congress, which among other provisions waives or speeds up environmental reviews for construction projects.The bill became law despite President Donald Trump not signing it, demanding that a separate voting bill be passed."The potential uplift to housing starts from streamlining environmental reviews, easing rules on manufactured housing and encouraging zoning reform will take time to filter through," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "Real residential investment will drag modestly on GDP growth over the coming quarters."Single-family housing starts, which account for the bulk of homebuilding, slipped 0.2% to a seasonally adjusted annual rate of 895,000 units, the Commerce Department's Census Bureau said on Friday. Starts fell in the Northeast, the South and Midwest regions, but rose in the West. Single-family homebuilding dropped 3.2% year-on-year in June.Permits for future construction of single-family homes dropped 2.4% to a rate of 871,000 units, the lowest level since August 2025. They fell 0.2% year-on-year in June.There is limited scope for a strong rebound in permits, with the elevated mortgage rates sidelining potential homebuyers.The rate on the popular 30-year fixed-mortgage has increased by nearly 60 basis points since the U.S. and Israel attacked Iran at the end of February. The rate averaged an 11-month high of 6.55% this week, data from mortgage finance agency Freddie Mac showed, as oil prices swung wildly as a shaky ceasefire between the U.S. and Iran collapsed.The brief lull in hostilities did boost consumer sentiment in early July across all age and income groups as well as political party affiliation, a separate report showed. The University of Michigan's survey of consumers was conducted from June 23 to July 13, with more than 70% of interviews completed before the resumption of war in the Middle East."Renewed uncertainty surrounding the U.S.-Iran conflict could keep energy prices volatile and weigh on household finances and perceptions of the economy, delaying a broader improvement in consumer sentiment," said Vivian Chen, financial markets economist at Nationwide.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info