Japan’s housing starts rose 8.2% year-on-year to 66,439 units in July 2026, slightly exceeding economists’ 7.8% forecast and extending the growth streak to four months. The increase followed June’s 18.6% surge, but momentum was less decisive: the seasonally adjusted annualized rate fell 1.6% from June to 774,000 units, its first monthly decline in three months. Rental housing rose 10.0% to 30,164 units and homes for sale increased 14.6% to 18,208, led by a 24.7% jump in condominiums. Owner-occupied homes were nearly flat, up 0.4% to 17,730 units. Growth was concentrated in the Tokyo Metropolitan Area and Kinki Region, while the Chubu Region declined 6.1%. January-through-July starts increased just 1.6% year-on-year to 430,252 units. The data suggest a recovery from the demand disruption associated with the Revised Building Energy Efficiency Act, but one that remains uneven and lacks strong momentum. The government recently upgraded its assessment of housing construction to generally flat, while high Tokyo-area residential prices have prompted some observers to warn of bubble risks.