Japan’s housing starts dropped 7.3% year-on-year in September 2025, below market consensus of a 7.9% decline and slower than a 9.8% fall in the previous month. This marked the sixth consecutive monthly decrease but the mildest in the sequence. New dwelling starts fell at a slower rate for owned homes (-5.6% vs -10.6% in August) and prefabricated housing (-0.4% vs -13.3%). Meanwhile, new construction starts remained weak for rented (-8.2% vs -8.1%) and built-for-sale (-8.3% vs -8.2%). At the same time, housing starts rebounded for issued units (53.7% vs -67.5%), and two-by-four homes (2.1% vs -6.3%).

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