Housing Starts See Unexpected Surge, With Momentum Set To Continue
After a sluggish year, home construction picked up in December, reaching its highest level in six months.
Privately-owned housing starts rose 6.2% month-over-month to a seasonally adjusted annual rate of about 1.4 million units, according to the U.S. Census Bureau and Department of Housing and Urban Development. The report includes two months of data: November and December. Both had been delayed by the government shutdown.
Despite the gains, December starts remain about 7% below the pace seen in December 2024, highlighting ongoing headwinds in the sector.
Single-family homes accounted for 981,000 starts, a modest increase from November, while multifamily construction (buildings with five units or more) totaled 402,000 units, underscoring continued interest in higher-density projects. Some analysts say lower mortgage rates late in the year may have helped support single-family construction momentum heading into 2026.
Home completions in December reached 1.525 million units, slightly above November and largely unchanged compared with a year earlier. Single-family completions were 1.023 million units and multifamily completions were 483,000 units. For all of 2025, about 1.498 million homes were completed, down about 8% from 2024, reflecting muted overall activity despite the year-end rebound.
Building permits, a key indicator of future construction, rose 4.3% in December to 1.448 million units, slightly above November and slightly higher than many forecasts, signaling potential ongoing momentum. Single-family permits were 881,000 units, while multifamily permits were 515,000 units. Total permits for 2025 were 1.425 million units, about 3.6% below 2024, suggesting builders are maintaining measured activity amid cautious sentiment.
"Housing starts were well above expectations in December and November, and there were large upward revisions to prior months," Nancy Vanden Houten, lead US economist at Oxford Economics, wrote in a statement to GlobeSt.
"Building permits were also stronger than expected, suggesting more momentum heading into 2026.
But the momentum doesn't just tie to building permits. Oxford Economics expects housing starts in 2026 to show "gradual improvement" versus last year. However, that will come after starts show some weakness in January compared with December's strong showing, according to Houten.
Source: GlobeSt/ALM