July Housing Starts Fall as Mortgage Rates

U.S. housing starts for July came in at 1.239 million seasonally adjusted, annualized units, missing the expected 1.35 million. The figure, reported by Zacks Investment Research, is the lowest since May and down from 1.42 million in June. Higher mortgage rates appear to be the primary cause, with the average 30-year fixed rate at 6.73% and rising. This follows the 30-year bond yield reaching a 19-year high of 5.32% this morning, while the 10-year yield hit a 19-month high of 4.74%.

Single-family homebuilding dropped 9.9% from the previous month and 16% from a year ago. Multi-family construction fell 15.6% month-over-month. Regional data showed a stark divide. The Midwest saw the sharpest annual decline at 27.6%, followed by the West at 13.8% and the South at 12.6%. In contrast, housing starts in the Northeast grew 17.1% year-over-year.

Building Permits Offer a Glimmer

A potential silver lining emerged from building permit data, a leading indicator for future starts. Preliminary figures for July showed permits rising 5% to 1.443 million units, the strongest reading since February. Zacks notes this is only the third positive print so far in 2026, though the numbers are subject to revision.

Trade Data Shows Broad Slowdown

Other economic indicators for July also pointed to cooling. Import prices unexpectedly fell 0.4%, against an expected 0.1% gain, marking the first back-to-back monthly decline since September of last year. The June figure was revised down to -0.3%. Year-over-year import price growth slowed to 5.9%. Excluding petroleum, core import prices rose 0.3%, highlighting the direct impact of oil prices. Export prices dropped 1.3%, the lowest monthly read in over three years and also the first consecutive decline since late summer 2024. Year-over-year export price growth cooled to 8.2% from a revised 10% in June.

Market and Corporate Reaction

Pre-market futures were lower following a down day Monday and the economic data. The Dow was down 79 points, the S&P 500 was down 39, and the tech-heavy Nasdaq was down 405 points. The small-cap Russell 2000 was down 11 points. Rising oil prices added pressure, with Brent crude back above $91 per barrel and U.S. West Texas Intermediate at $85 per barrel as hopes faded for reopening the Strait of Hormuz amid regional tensions.

In a related corporate development, Home Depot reported second-quarter earnings of $4.92 per share, beating the Zacks consensus estimate of $4.71. Revenue was $47.86 billion, up 1.88% from estimates. The company's CFO stated that CEO Ted Decker is expected to return from medical leave. Home Depot's stock rose 1.5% on the news, nearly bringing it back to breakeven for the year. The source report concluded with promotional material for a separate investment research report on quantum computing stocks.