New home construction is losing momentum across the United States, with some of the steepest declines concentrated in Sun Belt cities that helped drive the country's pandemic-era building boom. Residential building permits are now a record 19.4 percent below the pre-pandemic trend, according to a new Zillow analysis, signaling that the recent homebuilding boom is losing steam even as the country continues to face a significant housing shortage. More than 1.42 million residential building permits were issued nationwide in the 12 months ending in July 2026, according to Zillow.
Permitting has now fallen year over year for 44 consecutive months. Austin recorded the largest year-over-year decline in permitting among major U.S. markets, with permits falling 25.3 percent over the past year. San Antonio followed with a 24.1 percent decline, while Orlando, Charlotte and San Diego also saw permitting fall by roughly 20 percent.
Other major markets also recorded substantial declines, including San Diego (19.2 percent), Baltimore (19 percent), Chicago (18.6 percent) and Columbus (16.8 percent). The declines extended to Nashville (14.6 percent), Phoenix (13.5 percent), Jacksonville (13.4 percent), Houston (13 percent) and Dallas (11.9 percent). The pullback is concentrated in markets that led the pandemic-era construction boom, particularly across the Sun Belt.
Zillow said some of those markets have seen a surge in overall housing inventory, making it more difficult for builders to justify starting new projects. These challenges are making it increasingly difficult for builders to deliver homes at prices that buyers can afford.” The slowdown isn't happening everywhere. Permitting gains are occurring mostly on the coasts and in the Midwest, where construction had been more subdued during the boom of the past several years.
San Jose saw permits more than double over the past year, rising 122 percent. Seattle followed with a 35.8 percent increase, while permitting rose 32.9 percent in Birmingham, 30.6 percent in Los Angeles and 29 percent in San Francisco. Those large percentage gains need some context.
In markets where construction has been depressed for years, even a relatively modest increase in new projects can produce a significant percentage swing. Los Angeles, for example, issued 34,696 permits over the past year—barely more than half the 61,275 permits issued in Dallas and the 59,214 issued in Houston during the same period. Other markets also saw permitting increases, including New York (19.4 percent), Salt Lake City (20.3 percent), Boston (14.4 percent) and Tampa (14.5 percent).
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