U.S. Housing Starts and Permits (December 2025)

Homebuilding activity rebounded to end 2025

• Housing starts rose 6.2% month-on-month (m/m) in December to 1.40 million (annualized) units, stronger than consensus expectations for 1.31 million units. This followed a 3.9% m/m uptick in November.
• December's uptick in housing starts was driven by an 11.3% increase in multi-family starts, with additional support from a 4.1% gain in single-family starts.
• Residential permits rose 4.3% m/m to 1.45 million annualized units in December. Permitting activity declined in the single-family segment (-1.7% m/m) while activity in the multi-family segment increased (+15.2% m/m).
• Among the four Census regions, housing starts jumped in the West (+37.5% m/m), while the Northeast and Midwest saw smaller gains (+5.6% m/m and +2.3% m/m respectively). The South recorded a modest decline (-2.8%).

Key Implications

• Homebuilding activity in the final two months of 2025 expanded at a moderate pace. A rebound in single-family starts was the driving force behind this uptick, with the decline in mortgage rates recorded in months prior likely boosting homebuilder sentiment about future demand. However, mortgage rates have stabilized in recent months, which will likely limit further support over the near-term. In 2025, single family starts fell 7.0% while multi-family starts rose 16.6%.
• The National Association of Homebuilders sentiment index for February showed a shift away from the optimism recorded at the end of last year. Affordability concerns remain elevated, with the impact on buyer foot traffic already showing up. We expect the Federal Reserve to remain on hold until the summer, which is likely to continue to weigh on homebuilding over the coming months.  

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