Housing starts in the United States fell 9.8% month-over-month to an annualized 1.366 million in January 2025, down from December’s 10-month high of 1.515 million and below market expectations of 1.4 million.
US housing starts decline in January
Single-family housing starts declined 8.4% to 993,000, while construction of multi-family buildings with five or more units dropped 11.0% to 355,000. The decline was most pronounced in the South, where housing starts fell 23.3% to 680,000. The Northeast also saw a sharp decrease of 27.6% to 105,000, while the Midwest recorded a 10.4% drop to 181,000.
Building permits show unexpected increase
In contrast, building permits, a key indicator of future construction, inched up 0.1% to a seasonally adjusted annualized 1.483 million, exceeding market expectations of 1.46 million. The increase was largely driven by a 13.2% rise in permits for housing with two to four units, reaching 60,000, which helped offset a 1.4% decline in permits for buildings with five or more units, now at 427,000. Single-family permits remained unchanged at 996,000. Regionally, the West and Midwest saw permit increases of 2.3% and 1.8%, respectively, while the South recorded a slight 0.1% dip, and the Northeast experienced a 6.1% decline. Despite the drop in housing starts, the rise in permits suggests continued demand and potential for future growth in the housing market.
