Single-Family Housing Starts Drop 9% YoY to 981K Units Despite 6.2% MoM Rise
December housing starts rose 6.2% month over month to a 1.40 million SAAR but remain 7.3% below last year’s pace. Single-family starts fell 9% year over year to 981,000 units while single-family permits dropped 10.9% despite a 4.3% monthly gain in overall permits.
1. December Housing Starts Overview
December housing starts increased 6.2% month over month to a seasonally adjusted annualized rate of 1.40 million, yet remain 7.3% below December 2024, highlighting ongoing weakness in overall residential construction activity.
2. Single-Family vs Multifamily Performance
Single-family starts, which account for about 70% of total starts, declined 9% year over year to 981,000 units, while multifamily starts rebounded on a monthly basis but still trailed by 3% annually.
3. Permit Data and Builder Sentiment
Total construction permits rose 4.3% month over month, but single-family permits fell 10.9% year over year even as multifamily permits jumped 15.5%; the builder confidence index slid to 36, with over one-third of builders cutting prices and 65% offering incentives.
4. 2026-2027 Forecasts and Recovery Signals
Single-family starts are projected to decline another 2% in 2026 before a 2% recovery in 2027, with total starts at 1.37 million in 2026 and 1.41 million in 2027, supported by easing mortgage rates to 6.1% and a 9.1% rise in purchase applications.