New residential construction in America plunged in July, missing estimates badly in the process, according to government data released on Tuesday. Who’s surprised?

Nobody’s hand should be raised. No one should be surprised at a lackluster showing for housing starts when builder sentiment’s been underwater for 28 consecutive months.

The headline starts print for July was an unfortunate 1.24 million (SAAR, obviously), well below consensus and the second slowest since May of 2022. The MoM decline, 12.4%, was the third in four.

The figure below shows you the single-family series, which is now at a multi-year low after dropping 10% to just 808,000.

As you can see, the single-family series maps pretty well onto NAHB builder sentiment, for obvious reasons.

The NAHB headline was a horrible 34 last month and barely improved in August, according to Monday’s update.

Note that the pace of single-family housing starts has spent just one month above a million since Donald Trump took office for the second time. That’s, um, ironic, isn’t it? He’s a builder, after all.

As the figure above reminds you, residential investment’s been no help to US GDP in quite a while. Although it chipped in at the margins in Q2, it’s a drag during most quarters.

Permits were a little better in Tuesday’s Department of Housing data, rising 5% overall and 2.5% for single-family builds. But at 894,000, the pace for the latter remains well below levels observed from mid-2023 to February of 2025.

You don’t need a lot of complicated analysis here. The US housing market’s in a very bad way. Builders are accordingly reluctant.