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Single-Family Slide Continues

Updated: Aug 8

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Two reports released recently suggest single-family construction may be headed for a larger correction than many expected. Any reading of the NAHB Homebuilder Confidence Index [1] above 50 suggests optimism among homebuilders. Any reading below 50 suggests pessimism. Even though the builder confidence showed a one-point improvement, it now stands at 38 – extremely pessimistic.


June’s single-family starts came in at a seasonally adjusted annual rate of 883, 000 units. This reflects a 4.3% Y-O-Y decline. At that rate, new home inventory levels will likely improve slightly but remain at over 8 months supply.


High inventories will trigger homebuilder reaction in three ways. They will:

  1. Continue to sweeten the deal to potential homebuyers by upgrade home finishes at no extra charge; engage in mortgage-rate buydowns; and provide closing cost assistance. According to a recent survey, 62% of home builders engage in one of these incentives.

  2. Cut prices: This, however, is made more difficult in the context of rising costs that have been heightened by tightened immigration and tariffs. According to the homebuilder survey, more than 38% of homebuilders have cut prices.

  3. Cut back the pace of new home starts and production.

This new data supports the view that single-family construction may be facing a larger decline this year than many expect. Given the sector’s importance in overall cement consumption, it may also indicate a ratcheting down in total market expectations for 2025 and early 2026.


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The Sullivan Report delivers subscription-based economic forecasts and market updates tailored to the cement, concrete, construction, and aggregates industries. Its flagship publication, the Cement Outlook, is released three times a year and features 5-year forecast projections, expert analysis, and actionable insights to support informed decision-making and long-term strategic planning amid an evolving economic landscape.


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