Housing starts saw some significant shifts in the single-family and multifamily sectors this month, which economists claim is a reaction from tariffs and other economic issues.
The latest data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau found that overall housing starts were up 1.6% in April to a seasonally adjusted annual rate of 1.36 million units. Year-over-year, overall starts were only down 1.7% from the April 2024 rate of 1,385,000.
While the overall numbers saw modest decreases for the most part, single-family starts were down 2.1% to a rate of 927,000, and are down a whopping 12% compared to April 2024.
National Association of Home Builders (NAHB) Chairman Buddy Hughes noted that this decline “mirrors builder sentiment, as elevated interest rates, uncertainty on the tariff front and rising construction costs are exacerbating housing affordability challenges.”
NAHB’s recently reported builder sentiment stats had hit their lowest level in the past year and the lowest grade overall since December 2022.
On the opposite end of the spectrum, multifamily starts jumped 11.1% to an annualized 420,000 pace, and leaped an impressive 28.8% year-over-year.
On a regional basis, housing starts were 12.9% higher in the Northeast, down 10.8% in the Midwest, up 10.9% in the South and 16.1% lower in the West.
In terms of building permits (a more leading indicator for housing construction), overall permits decreased 4.7% to a 1.41-million-unit rate in April, and were down 3.2% year-over-year. Single-family permits decreased 5.1% to a 922,000-unit rate and are down 6.2% compared to April 2024. Multifamily permits decreased 4.4% to a 431,000 pace, but were up 2.6% year-over-year.
Regionally, permits were up 14.3% in the Northeast, 8.1% lower in the Midwest, down 9.6% in the South and 3.4% higher in the West.
Looking at completions, completed builds fell 5.9% to a rate of 1,458,000, down 12.3% year-over-year. Single-family completions were down 8% to a rate of 943,000, and were down 16.6% year-over-year. Multifamily completions were up slightly by 0.2% to a rate of 507,000, but were down 1.7% year-over-year.
Realtor.com®’s Senior Economist Joel Berner pointed out that completions saw the most decreases, but that “this may have less to do with tariffs (which we would expect to impact the more forward-looking metrics) and more to do with the fact that completions have consistently trailed permits and starts for the past year and there were fewer homes in the final stages of construction than usual.”
“Many builders, like many retailers with their inventory, have been stockpiling materials in advance of tariffs being implemented, which may explain why housing starts were less impacted than permits,” he continued.
Danushka Nanayakkara-Skillington—NAHB’s assistant vice president for forecasting and analysis—also noted that economic uncertainty will likely continue, but recent trade deals may provide some relief.
“Developments on the tariff front concerning the United Kingdom and China along with major tax legislation advancing in Congress should provide a boost to housing demand and positive momentum for the economy,” she said.
Berner emphasized his final point, one that has been expressed by many industry economists: “The trade war is bad for housing.”
“We have already seen it subdue buyers by causing anxiety about job loss and personal financial situations. What we’re seeing now are the more concrete supply-side effects: fewer and less affordable newly built homes under construction,” he continued. “The cost of owning a home and the income required to do so have skyrocketed since the pandemic, and tariffs will continue to put this part of the American Dream even further out of reach for millions.”
