U.S. homebuilders significantly scaled back new projects in July, data from the Commerce Department showed Tuesday.
Construction of new homes in the U.S. fell to a seasonally adjusted annual rate of 1.45 million, a 9.6 percent drop from the prior month.
That is the lowest level since February 2021.
Compared with a year ago, housing starts were down 8.1 percent.
Construction of new single-family houses fell 10.1 percent to an annual rate of 916,000, below the prepandemic level. Starts have now fallen every month since February 2022.
Building permits for new homes fell 1.3 percent to 1.67 million in July.
The data showing the sharp drop in home building follows a survey from the National Association of Home Builders that showed sentiment plunging amid high construction costs, rising interest rates, and families squeezed by high inflation.
“Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession,” said NAHB chief economist Robert Dietz.