My friend John, an electrical engineer living in Austin, has been house hunting with his wife for the past year. Every time we video chat, he’s either frustratedly scrolling through listings or venting about skyrocketing prices. Just last month, he sighed and said, “We either can’t afford anything decent, or the places we can afford are falling apart. And the new builds? They’ve practically disappeared.”
He’s not imagining things. According to data released by the U.S. Census Bureau on June 18, housing starts dropped by nearly 10% in May—down to an annualized pace of just 1.26 million homes. That’s the lowest we’ve seen since the pandemic first froze construction in early 2020. Economists were expecting a dip, but this sharp a drop caught many off guard.
For buyers like John—and millions of other would-be homeowners—it’s a troubling sign. In a market already suffering from a dire shortage of housing, this slowdown is only turning the screw tighter.
Mary, a single mom I know in Massachusetts, has been experiencing a similar uphill battle. She’d hoped to buy a modest home before her son starts middle school. Last fall, she had her eyes on a promising new development. But just as she was getting her hopes up, the project was suddenly put on hold. “The developer said materials were getting too expensive, and the loans were killing them,” she told me over the phone.
Turns out she’s not alone. Construction costs have been steadily climbing for years—timber, steel, copper, you name it. But now, a fresh wave of tariffs on imported metals and lumber is pushing prices even higher. And for builders, that means tough decisions. Many are choosing to scale back or put projects on pause altogether.
“Homebuilding is facing strong headwinds from all sides,” wrote Priscilla Thiagamoorthy, a senior economist at BMO. “High input prices, steep borrowing costs, growing inventory pressure—and now tariffs—are all piling on.”
The sentiment among builders has already started to sour. Earlier this week, their confidence ratings dropped sharply, dashing hopes for any kind of near-term rebound in housing construction.
Economist Heather Long was blunt: “The U.S. desperately needs more homes—especially affordable options for first-time buyers—but that’s just not going to happen at this sluggish pace.” Her estimate? We need to be building two million new homes per year to keep up. Right now, we’re not even close.
At this point, the housing crisis is no longer just about affordability. It’s about availability. Even middle-class buyers are finding themselves priced out or simply unable to find a place to live. It's not uncommon to hear young couples in California debating whether to move to Texas, hoping for better luck—only to realize construction there has slowed down too.
The bigger issue? If this trend continues, we won’t just have a “housing affordability” crisis. We’ll have a “housing existence” crisis.
A house isn't just a financial asset—it's a foundation. It’s where kids grow up, where families start, where people plan retirements and futures. Yet increasingly, that foundation is being yanked out from under the very people who need it most.
For now, folks like John and Mary may have no choice but to wait. But that wait shouldn’t be passive. We need to demand smarter housing policies, better supply chain coordination, and a rethink of how we treat housing—not just as a commodity, but as a core piece of public well-being. Because a thriving country can’t be built on a foundation where most people can’t even find a place to live.