U.S. Housing Starts Drop 9.8% as Costs and Weather Hit Hard
The U.S. Census Bureau reports that housing starts dropped 9.8% in January 2025, hitting 1.36 million units.
This decline follows a revised 1.51 million units in December 2024, surprising economists who expected an 8.6% dip. Compared to January 2024, starts fell 0.7%, signaling a rocky start for builders.
Freezing weather slowed construction nationwide, while mortgage rates climbed to 6.9% from 6.6% a year ago. Builders face rising costs as proposed tariffs loom—25% on steel and aluminum threaten margins.
Single-family starts slid 8.4% to 1.03 million units, and multifamily starts plunged 11% to 336,000 units. Meanwhile, building permits edged up 0.1% to 1.483 million units, beating forecasts of a 2.2% drop.
Single-family permits rose 1.6% to 992,000 units, but multifamily permits fell 5% to 491,000 units. Last year, total permits hit 1.47 million, down 2.6% from 2023’s 1.51 million.
Completions offered some relief, jumping 7.6% to 1.65 million units from December’s 1.53 million. Single-family completions dropped 7.4% to 948,000 units, while multifamily soared to 570,000 units. In 2024, completions reached 1.63 million units, up 12.4% from 2023.
The South saw a 5.2% drop in 2024 starts, and the West fell 7.7%. The Northeast gained 9.1%, while the Midwest held steady. Builders grapple with a housing shortage—4 to 5 million units—yet high rates and costs curb progress.
Economists note weather likely exaggerated January’s decline, but deeper issues persist. Rising rates squeeze affordability, and tariffs could hike material prices further. Still, 2024 saw single-family starts rise 6.5% to 1.01 million units, though multifamily dropped 25%.
Housing drives 4% of U.S. GDP, so this slump ripples through jobs and manufacturing. Builders remain cautious as the Trump administration’s trade plans unfold. Permits hint at future activity, yet uncertainty lingers.
The figures tell a story of resilience tested by reality. Demand endures, but builders navigate a maze of costs, weather, and policy shifts. January’s dip marks a challenge, not a collapse, in a market hungry for homes.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief