Escrow Agencies and Other Real Estate Services NAICS 531390

Aug 19, 2025 - Housing Starts, Permits Rise

• The number of building permits issued for single-family, privately-owned housing units increased 0.5% month-over-month but fell 7.9% year-over-year in July 2025. Single-family housing starts grew by 2.8% month-over-month and increased 7.8% year-over-year in July. Homebuilding and planning activity improved in July despite continued high interest rates and economic uncertainty, according to Reuters. The Federal Reserve has held back on interest rate cuts amid concerns that the Trump administration’s tariff policies could reignite inflation. However, recent signals of emerging softness in the labor market have many investors anticipating that the Fed will announce a quarter percentage point cut to interest rates at its meeting in September, which helped ease mortgage rates in August.
• So far in 2025, small investors are playing an outsized role in the U.S. single-family housing market, according to The Wall Street Journal. In the first half of 2025, small investors accounted for about 25% of home purchases, outpacing large institutional buyers, according to property analytics firm Cotality. While traditional home buyers remain sidelined by high home prices and interest rates, small investors are capitalizing on seller incentives. Unlike large firms constrained by institutional reporting, smaller investors can take greater risks and are increasingly targeting mid-priced homes to renovate and rent.

• Renters were the sole driver of the rise in household formations in the second quarter of 2025, according to the Census Bureau’s most recent Housing Vacancy Survey (HVS) and the National Association of Home Builders (NAHB). In Q2 2025, the total number of US households increased to 132.5 million, up by 1.2 million compared to 131.3 million in the second quarter of 2024. The increase in new households was entirely driven by renters, amid the lowest homeownership rate since 2019. US homeownership fell to 65% of total households in Q2 2025 and was 4.2 percentage points below the 25-year average of 66.3%. High home prices, elevated mortgage rates, and low inventories have pushed housing affordability to the lowest level in decades.
• According to data from the US Census Bureau and the National Association of Realtors, the US median price for an existing home was higher than the median price for a new home in the second quarter of 2025. In Q2 2025, the median price for a new home was $410,800, or $18,600 less than the median price for an existing home ($429,400). Buyers typically pay a premium to purchase a new home. Between 2010 and 2019, new homes were, on average, $66,000 more expensive than existing homes. However, the price gap has been narrowing over the past five years, with average new home prices dropping to $24,800 above the average existing home price. Homeowners with low interest rates have been reluctant to sell, pinching inventories. Meanwhile, builders have focused on affordability by building on smaller lots, reducing home sizes, and offering incentives.