March data shows strong rebound in construction activity, though declining permits point to cautious outlook ahead.
By yourNEWS Media Newsroom
New federal data shows a sharp increase in U.S. housing construction activity in March, with single-family homebuilding reaching its highest level in more than a year even as future indicators point to potential slowing.
According to the U.S. Census Bureau, total housing starts rose 10.8% in March to a seasonally adjusted annual rate of 1,502,000 units, up from a revised 1,356,000 in February. The figure also represents a 10.8% increase compared to March 2025.
Single-family housing starts climbed to an annual rate of 1,032,000, a 9.7% increase from February and the highest level since early 2025. Multi-family construction, including buildings with five or more units, reached a rate of 446,000.
Despite the surge in starts, building permits—an indicator of future construction—declined sharply. Permits for privately owned housing units fell 10.8% from February to an annual rate of 1,372,000, and were down 7.4% compared to March 2025.
Single-family permits dropped to 895,000, a 3.8% decrease from the prior month, while permits for multi-family units stood at 427,000.
Ted Rossman, principal analyst at Bankrate, said the contrasting trends suggest uncertainty ahead. “Housing starts popped in March, beating expectations, but building permits plummeted,” Rossman said. “This foreshadows slower times ahead. The economic uncertainty exacerbated by Iran war impacts and lingering tariff concerns continues to weigh on the housing market.”
Industry leaders offered a more measured assessment. Bill Owens, chairman of the National Association of Home Builders, said the increase in construction activity is a positive sign but noted ongoing sensitivity to borrowing costs and material expenses.
“Overall, the uptick in housing starts is a positive development for residential investment and signals that the sector may be stabilizing,” Owens said.
Danushka Nanayakkara-Skillington, the group’s assistant vice president for forecasting and analysis, said builders remain cautious. “While this is an encouraging sign, the pace of construction is likely to remain measured as builders continue to navigate elevated financing costs and labor availability,” she said.
Completion data showed weaker performance. The annual rate of completed housing units was 1,336,000 in March, down 12.8% compared to the same month a year earlier. Single-family completions declined 4.8% from February to 896,000.
Regionally, construction gains were strongest in the Northeast, where combined starts rose 36%. The Midwest saw a 7.8% increase, and the South posted a 3% gain, while the West recorded a 15.5% decline.
Permit activity followed a mixed regional pattern, with increases in the Northeast, Midwest, and West, but a 9.1% decline in the South.
The homebuilding industry continues to face supply challenges. The National Association of Home Builders estimates that approximately 587,000 single-family homes and 677,000 apartment units are currently under construction. The group has previously projected that the United States needs to add roughly 1.5 million housing units to address existing shortages.
Rossman noted that federal lawmakers are considering legislation aimed at boosting housing supply, though disagreements remain over key provisions.
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