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

Homebuilding activity bounces back in February

• Housing starts rose 11.2% month-on-month (m/m) in February to 1.5 million (annualized) units, well ahead of expectations for a smaller improvement to 1.385 million and almost offsetting all of January's decline. Revisions to the data for the two prior months removed 5k units from the previously reported tallies.
• February's monthly starts increase was shared between the single-family and multi-family segments. Single-family starts were up 11.4% m/m (113k units) and multis rose 10.7% m/m (or 38k units).
• Residential permits were down 1.2% from January, falling to 1.46 million units. However, single-family permits were virtually unchanged on the month (992k in February vs 994 in January).
• Three of the four Census regions saw gains, with the West (+5.9% m/m), Northeast (+47.4% m/m), and South (+18.3% m/m) all posting improved readings. The Midwest was the lone region to post a decline, falling 24.8% m/m.

Key Implications

• Homebuilding bounced back in February, almost completely offsetting January's slump. The longer-term picture shows a housing market that appears to be in a relatively stable, albeit cautious state, with single family starts down 2.3% year-on-year (y/y), while multis are down 4.6%.
• Uncertainty remains the name of the game. The National Association of Home Builders reported builder confidence fell again in February as concerns about tariffs and elevated construction costs offset optimism on potential regulatory changes. From our lens, the general economic uncertainty and increasingly downbeat consumer sentiment mean that the housing sector is likely to drag on overall growth in the coming months.  

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.