Single-Family Starts Face Headwinds Amid Economic and Tariff Uncertainty
Originally Published by: Eye on Housing — May 16, 2025
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Economic uncertainty stemming from tariff issues, elevated mortgage rates and rising building material costs pushed single-family housing starts lower in April.
Overall housing starts increased 1.6% in April to a seasonally adjusted annual rate of 1.36 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The April reading of 1.36 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.1% to a 927,000 seasonally adjusted annual rate and are down 12.0% compared to April 2024. On a year-to-date basis, single-family starts are down 7.1%. The three-month moving average (a useful gauge given recent volatility) is down to 991,000 units, as charted below.
The multifamily sector, which includes apartment buildings and condos, increased 10.7% to an annualized 434,000 pace. The three-month moving average for multifamily construction has trended upward to a 406,000-unit annual rate. On a year-over-year basis, multifamily construction is up 30.7%.
On a regional and year-to-date basis, combined single-family and multifamily starts were 19.8% higher in the Northeast, 4.4% higher in the Midwest, 3.4% higher in the West , and 7.4% lower in the South.
The total number of single-family homes and apartments under construction was 1.4 million units in April. This is the lowest total since June 2021. Total housing units now under construction are 14.3% lower than a year ago. Single-family units under construction fell to a count of 630,000—down 7.1% compared to a year ago. The number of multifamily units under construction has fallen to 788,000 units. This is down 15.6% compared to a year ago.
On a 3-month moving average basis, there are currently 1.3 apartments completing construction for every one that is beginning construction. While apartment construction starts are down, the number of completed units entering the market is rising due to prior elevated construction levels. Year-to-date, the pace of completions for apartments in buildings with five or more units is down 3.4% in 2025 compared to 2024. An elevated pace of completions in 2025 for multifamily construction will place some downward pressure on rent growth.
Overall permits decreased 4.7% to a 1.41-million-unit annualized rate in April. Single-family permits decreased 5.1% to a 922,000-unit rate and are down 6.2% compared to April 2024. Multifamily permits decreased 3.7% to a 490,000 pace but are up 2.9% compared to April 2024.
Looking at regional permit data on a year-to-date basis, permits were 5.1% higher in the Midwest, 3.5% lower in the West, 3.8% lower in the South, and 20.3% lower in the Northeast.