The housing market continued to cool down this summer due to high interest rates, labor shortages, and rising material costs.

According to a recent report, housing starts decreased by 6.8% in July compared to the previous month. This is the lowest level since the start of the pandemic. Single-family home starts fell even more sharply, dropping by 14.1%.

“The decline in new home construction mirrors our latest builder surveys, which show that buyers remain concerned about challenging affordability conditions and builders are grappling with elevated rates for builder loans, a shortage of workers and lots, and supply chain concerns for some building materials,” said Carl Harris, chairman of the National Association of Home Builders and custom home builder from Wichita, Kansas.

The National Association of Home Builders (NAHB) attributed the decline to affordability concerns and challenges for builders, including higher interest rates, labor shortages, and supply chain issues.

However, there is some hope for the housing market. Economists predict that interest rates will start to decline in the coming months, which could boost demand for new homes.

So, what does the future hold for the housing market? Will interest rate cuts be enough to revive the market, or will other factors continue to weigh it down? Only time will tell.