Advertisement
Private equity has played a significant role in shaping Indi...
In today’s real estate landscape, fitness is often treated...
In this episode of Prop Personalities, we sit down with Hars...
Luxury real estate is one of the most talked-about segments ...
Welcome to Prop Personalities by Prop News Time - a podcast ...
Single-family housing starts in the US rose sharply to a 13-month high in March, reflecting a short-term boost in construction activity. However, a drop in building permits and weak builder confidence suggest that this momentum may not sustain. Rising mortgage rates and higher material costs have continued to impact the sector. While multi-family construction also showed growth, permits declined significantly. Economists expect residential investment to remain under pressure, even as overall economic growth is projected to improve modestly in the first quarter.
Single-family homebuilding activity in the US saw a notable increase in March, reaching its highest level in over a year. Data released by the Commerce Department’s Census Bureau showed that housing starts for single-family homes, which form the majority of residential construction, rose 9.7% to a seasonally adjusted annual rate of 1.032 million units. This marks the strongest level recorded since February 2025 and reflects an 8.9% increase compared to the same period last year. Advertisement
The growth follows a steady rise in previous months, with housing starts moving up from 898,000 units in January to 941,000 units in February. Despite this improvement, indicators for future construction activity remained weak. Permits for single-family homes, which signal upcoming projects, declined 3.8% to an annual rate of 895,000 units. On a yearly basis, these permits were down 7.9%, highlighting caution among developers.
The Census Bureau has recently cleared a backlog in housing data reporting that had been caused by last year’s government shutdown. At the same time, the housing sector has been dealing with multiple challenges. Tariffs on imported materials such as lumber and cabinets had already increased construction costs. In addition, geopolitical tensions involving the US and Israel with Iran disrupted a previous decline in mortgage rates, adding further pressure on demand.
A survey conducted by the National Association of Home Builders indicated that builder confidence weakened in April. Developers reported that suppliers had raised prices due to higher fuel costs, including gasoline and diesel. The association estimated that energy-related expenses account for around 4% of total residential construction input and service costs, adding to overall project costs.
Mortgage rates have also moved upward in recent weeks. Data from Freddie Mac showed that the average rate on a 30-year fixed mortgage increased from 5.98% in late February to 6.23% in the past week. Rates had briefly climbed as high as 6.46% at the beginning of April, making borrowing more expensive for homebuyers.
In the multi-family segment, which includes projects with five or more units, housing starts rose 9.6% to an annual rate of 446,000 units. On a yearly basis, this segment recorded a stronger growth of 13.5%. However, building permits for multi-family projects fell sharply by 23.5% to 427,000 units, indicating a slowdown in upcoming supply.
Overall housing starts, combining both single-family and multi-family units, increased 10.8% to an annual rate of 1.502 million units, also showing a similar rise compared to last year. However, total building permits declined 10.8% to 1.372 million units and were down 7.4% year-on-year, pointing to softer construction activity ahead.
Economists expect that residential investment, which includes homebuilding, likely contracted for the fifth consecutive quarter in the January–March period. A Reuters survey suggested that the US economy may have grown at an annualized rate of 2.3% during this period, an improvement from the 0.5% growth recorded in the previous quarter.
Source Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
