Japan’s housing starts increased 8.2% year-on-year in July 2026, slowing significantly from an 18.6% surge in the previous month. Still, the latest reading marked the fourth consecutive month of growth, surpassing market expectations of a 7.9% rise. Growth moderated across major categories, with owner-occupied homes rising just 0.4% (vs 15.7% in June), rental housing (10.0% vs 24.6%), and built-for-sale homes (14.6% vs 14.2%). Meanwhile, starts for two-by-four homes fell further (-8.5% vs -7.4%). Meanwhile, prefabricated housing starts fell 6.9%, reversing a 13.7% surge in June.