March saw a significant increase in housing construction activity, with a noticeable rebound in both single-family and multifamily starts.
This suggests that builder activity has improved, despite the ongoing challenges posed by financing costs and affordability constraints.
The monthly increase suggests that momentum has been rekindled; however, year-to-date trends are inconsistent, particularly in the single-family sector, and permit activity indicates that caution should be exercised in the future.
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau report that overall housing starts increased 10.8 percent in March to a seasonally adjusted annual rate of 1.5 million units.
This tempo is indicative of the number of housing units that builders would construct over the next 12 months if March’s activity were to continue.
Single-family starts within the total increased by 9.7 percent to a seasonally adjusted annual rate of 1.03 million units, representing an 8.9 percent increase from March 2025.
Single-family starts have decreased by 5.5 percent year-to-date. The three-month moving average, which has increased to 957,000 units, offers a more precise indication in light of the recent volatility.
The annualized pace of multifamily starts, which encompasses apartment buildings and condominiums, has increased by 13.3 percent to 470,000 units, and is 15.5 percent higher than March 2025.
The three-month moving average for multifamily construction has increased to 462,000 units, and activity is 15.5 percent higher than it was a year ago.
Regionally, the Northeast experienced a 36 percent increase in combined single-family and multifamily starts year-to-date, while the Midwest and South experienced a 7.8 percent and 3.0 percent increase, respectively.
Conversely, the West experienced a 15.5 percent decrease.
In March, the total number of housing units under construction was 1.3 million, a 9.8 percent decrease from the previous year.
The number of single-family residences under construction decreased by 7.3 percent year over year to 587,000 units.
The number of multifamily units under construction has decreased to 677,000, an 11.8 percent decrease from the previous year and a decrease from the apex of over 1 million units in December 2023.
The annual rate of completions of single-family homes has decreased to approximately 896,000 units, which is indicative of the enduring challenges in the residential construction sector.
This represents a 14.5% decrease from the previous year.
The same trend was observed in the completion of multifamily buildings with five or more units, which decreased by 9.1 percent year over year to a 452,000-unit pace.
Total completions in both sectors have decreased by 13.5% year-to-date.
In March, the annualized rate of permits decreased by 10.8 percent to 1.37 million units.
The rate of single-family permits has decreased by 3.8 percent to 895,000 units, which is a 7.9 percent decrease from March 2025.
The annualized pace of multifamily permits has decreased by 21.5 percent to 477,000 units, and it has decreased by 6.3 percent since March 2025.
Permits were 15.4 percent higher in the Northeast, 6.0 percent higher in the West, and 1.1 percent higher in the Midwest on a year-to-date basis when examining regional permit data.
Nevertheless, the South experienced a 9.1 percent decrease in the number of permits.
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