New construction across America’s hopelessly beset housing market decelerated twice as sharply as economists expected last month, data released Wednesday showed.

Overall housing starts fell nearly 9% to a 1.307 million pace in August, according to the figures. Consensus expected a much shallower decline. The disappointing result reflected already-bloated inventories and still-slow sales.

Single-family starts, which track reasonably well with the NAHB’s gauge of builder sentiment, fell 7%.

As the figure shows, the implied annual rate — 890,000 — for one-family new construction was the slowest since July of 2024 and counted as just the second sub-900,000 print since the spring of 2023. Multifamily construction slid even harder.

The data came a day on from yet another lackluster read on builder moods, which remained a country mile below levels indicative of net optimism on the NAHB’s measure.

Single-family permits fell for the fifth month in six to an 856,000 annual rate.

As the chart shows, that pace was the slowest since early 2023, which is to say both single-family starts and permits are now the most tepid in two and a half years.

To reiterate, this is evidence of an over-supplied market. There’s more for-sale new construction than at any point since the subprime bust, and the pervasiveness of builder price cuts (nearly four in 10 cut prices this month) nods to desperation.

Total under-construction single-family units fell more than 2% in August, Wednesday’s government data showed. That series sits at its lowest levels since January of 2021.

Meanwhile, the weekly MBA update showed the average 30-year fixed fell another 10bps over the week. I discussed rates here on Tuesday so I won’t belabor the point other than to chart the decline.

As the figure shows, the multi-week drop on the MBA’s gauge is very pronounced and although purchase activity remains subdued (the rate relief simply isn’t enough yet to compensate for record high prices), refis surged.

“Indicative of the weakening job market, and in anticipation of a rate cut from the Fed, mortgage rates last week dropped to their lowest level since last October [and] homeowners responded swiftly,” MBA SVP Mike Fratantoni wrote, editorializing around the — checks notes — 58% WoW jump on the seasonally-adjusted refi index.

In a telling statistic, the average loan size of refinances was the highest in the 35-year history of the MBA survey, Fratantoni said.