February single-family housing starts hit 12-month high

In February, single-family starts experienced a substantial increase in value due to the scarcity of available inventory.

However, builders continue to contend with persistent shortages of labor and buildable sites, as well as with elevated construction costs that are a result of tariff issues.

According to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, the seasonally adjusted annual rate of housing starts increased by 11.2% in February to 1.50 million units. The number of housing units that builders would commence if development continued at this rate for the next 12 months is represented by the February reading of 1.50 million starts.

The seasonally adjusted annual rate of 1.11 million single-family starts, which is the highest since February 2024, increased by 11.4% within this aggregate number. The annualized pace of the multifamily sector, which encompasses apartment buildings and condominiums, increased by 10.7% to 393,000 units.

Although February saw a surge in single-family production due to a lack of existing inventory and strong demand, NAHB’s most recent builder survey indicates that builders are still apprehensive about the difficult housing affordability conditions, particularly the high costs of financing and construction, as well as tariffs on essential building materials.

The combined single-family and multifamily starts were 4.7% lower in the Northeast, 21.5% lower in the Midwest, 8.3% lower in the South, and 20.2% higher in the West on a regional and year-to-date basis.

In February, the annualized rate of permits decreased by 1.2% to 1.46 million units, which is a 6.8% decrease from February 2024. The rate of single-family permits decreased by 0.2% to 992,000 units, a 3.4% decrease from the previous year. The rate of multifamily permits decreased by 3.1% to 464,000.

Permits were 30.1% lower in the Northeast, 2.3% higher in the Midwest, 2.1% lower in the South, and 12.5% lower in the West when examining regional permit data on a year-to-date basis.

In February, the quantity of single-family homes under construction decreased by 6.7% from the previous year, with a total of 640,000 homes. The number of apartments under construction increased by 0.3% in February, reaching an annualized pace of 772,000. After 18 months of consecutive declines, it represents the first increase; however, it remains 20% lower than just one year ago.

There were 526,000 multifamily completions in February, down 15% from the previous year. For each apartment starting construction, there are 1.5 apartments completing the construction process.

[Read more about this story on Eyeonhousing.org]