While this technically signals some cooling in new construction potential, it wasn't much more of a drop than investors expected. Moreover, there has been a gradual cooling trend intact for more than 2 years. That's not as ominous as it sounds considering construction activity is still higher than it was in mid-2019.
Housing starts, which measure groundbreakings for new home construction, actually came in just slightly higher than forecasts, barely declining month-over-month. Here too, there is a general cooling trend over the past few years, but a flatter trend over the past few months.
Housing completions are a different story. They never experienced the same correction as starts and permits. They may have dropped from last month's high (highest level since 2007), but completions have been in a decisive uptrend since the middle of 2023 and a broad uptrend since 2011.
Here's the bigger-picture context for construction:
