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

Homebuilding activity fell in March amid policy uncertainty

• Housing starts fell 11.4% month-on-month (m/m) in March to 1.32 million (annualized) units, notably below expectations for a smaller decline. Revisions to the data for the two prior months added 4k units to the previous reported tallies.
• March's large decline in housing starts was concentrated in the single-family segment - down 14.2% m/m (or 156k units). The smaller multi-family segment recorded a smaller decline of 3.5% m/m (or 14k units).
• Residential permits increased 1.6% m/m to 1.48 million annualized units. This was driven by a 9.3% m/m increase in multi-family permits, while single-family permits fell 2.0% m/m.
• Among the four Census regions, gains were recorded in the Midwest (+76.2% m/m) and the Northeast (+1.5% m/m). Declines were recorded in the South (-17.1% m/m) and West (-30.9% m/m).

Key Implications

• March's homebuilding report was decidedly negative, with the monthly decline in single-family starts being the largest since April 2020. This occurred despite a modest decline in mortgage rates during the month, as elevated policy uncertainty clouded the outlook for home sales this year. The multi-family segment also remained in a relatively restrained state last month despite the modest rebound in permits.
• Shifting into April, we have seen homebuilder confidence remain subdued amid elevated trade uncertainty and the impact it is having on input costs. The National Association of Homebuilders noted that 60% of surveyed homebuilders had reported an increase in supplier costs, with input costs rising by 6.3% on average. This will likely only add to existing affordability challenges, which combined with an expected slowdown in the economy will weigh on the homebuilding industry over the coming quarters.  

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.