March saw a significant downtick in privately owned housing starts, declining 11.4% from February’s revised estimate of 1,494,000 to reach a seasonally adjusted annual rate of 1,324,000. This comes on the heels of an 11.2% bump in housing starts in February following a 9.8% month-over-month decline in January. Privately owned housing starts were up on a yearly basis by 1.9%, from a March 2024 rate of 1,299,000.
The newly released figures are courtesy of the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau.
Building permits were reported at a seasonally adjusted annual rate of 1,482,000—a 1.6% increase from February’s revised rate of 1,459,000 and a 0.2% year-over-year decline from the March 2024 rate of 1,485,000.
Buddy Hughes, chairman of the National Association of Home Builders (NAHB), expressed concern amid economic uncertainty, an elevated mortgage rate environment and construction cost challenges
“The drop in March housing starts is a clear signal that affordability pressures are intensifying,” he said. “Elevated mortgage rates and rising construction costs are making it increasingly difficult to deliver homes at price points accessible to entry-level buyers. We’re seeing demand soften as more potential homeowners are priced out of the market.”
Dr. Selma Hepp, chief economist of Cotality (formerly CoreLogic), was similarly bearish on the outlook for new housing starts, stating that uncertainty with regard to tariffs has thrown an additional wrench into an environment that was challenging to begin with. She predicts that the demand for homes will experience an ongoing decline until the economic situation has more clarity.
“Consumer confidence continues to weaken amid tariff and economic policy uncertainty. Adding to the pain is mortgage rates hovering around the 7% mark this week. Therefore, any improvement in housing demand seen throughout March will continue to cool off for the near future. We expect homebuilders to pick up pace once demand rises and the impact of the global trade uncertainty becomes more manageable to their bottom line.”
The difficult outlook was also shared by Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.
“March’s decline in housing production reflects the ongoing struggle to balance construction costs with the need for affordable housing. High material prices and labor shortages continue to challenge our ability to build homes that meet the budget constraints of many families. Without targeted policy support, addressing the affordability crisis remains an uphill battle.”
Regional breakdown of housing starts
The Midwest led the way on a month-to-month basis for total housing starts, rising 76.2% from February to March. The Midwest also rose 44.2% on a yearly basis for total housing starts. For single-family starts, the Midwest rose 20.4% month-to-month, while declining 12.6% year-over-year.
In contrast, the Northeast experienced a very modest 1.4% rise in total housing starts month-over-month, while experiencing a 45.8% rise year-over-year. Single-family housing starts in the Northeast fell on a monthly basis by 25.8% and year-over-year by 1.5%.
On the other end of the spectrum, the West saw its total housing starts fall 30.9% on a monthly basis and 8.8% year-over-year. Single-family housing starts fell 15% from February to March, while rising 3.6% year-over-year.
In the South, total housing starts fell 17.1% from February to March—declining 8.1% year-over-year. Single-family housing starts in the region fell 17.6% month-over-month and 14.8% year-over-year.
Regional breakdown of building permits
The Midwest also led the way for building permits issued for the month of March, with total permits increasing 11.5% month-over-month and 45% year-over-year. Single-family home permits in the Midwest rose 7.7% month-over-month and 16.7% year-over-year.
The South saw a more modest rise in total permits, rising 5.5% month-over-month and 13.9% year-over-year. Single-family permits rose 10.7% month-over-month and 14.8% year-over-year.
The Northeast saw total building permits decline 3.1% month-over-month and 18.4% year-over-year. While single-family permits within the region were unchanged month-to-month, they declined 7.1% year-over-year.
The West saw total permits rise 1.8% month-over-month and decline 15.2% year-over-year. Single-family permits declined both month-over-month (3.4%) and year-over-year (12.5%).
For the full report, click here.
