U.S. Housing Starts and Permits (April 2025)
Andrew Foran, Economist | 416-350-8927
Date Published: May 16, 2025
- Category:
- U.S.
- Data Commentary
- Real Estate
Homebuilding activity picked up modestly in April
- Housing starts rose 1.6% month-on-month (m/m) in April to 1.36 million (annualized) units, roughly matching consensus expectations. Revisions to the data for the two prior months added 8k units to the previously reported tallies.
- April's rebound in housing starts was driven by the multi-family segment - up 10.7% m/m (or 42k units). The larger single-family segment recorded a decline of 2.1% m/m (or 20k units).
- Residential permits fell 4.7% m/m to 1.41 million annualized units. Permitting activity declined in both the single-family (-5.1% m/m) and multi-family (-3.7% m/m) segments.
- Among the four Census regions, gains were recorded in the Northeast (+12.9% m/m) and the South (+11.0% m/m). Declines were recorded in the West (-16.1% m/m) and Midwest (-10.8% m/m).
Key Implications
- Homebuilding activity picked up to start the second quarter as multi-family construction continued to trend higher with year-to-date starts 14.3% above 2024 levels. However, this is in part being driven by the lagged influence of rate cuts through the second half of last year, with permitting activity in the multi-family sector down 4.2% year-to-date. Single-family starts have remained on a relatively softer footing, with declines in three of the past four months and permitting activity pointing to a continuation of this trend in the months ahead.
- Preliminary readings for homebuilder sentiment in May remained downbeat as elevated policy uncertainty weighed on sales activity. However, survey results were largely collected before announcements regarding agreements with China and the U.K. were made. Still, this is likely to represent only a modest reprieve for the industry, as product-specific tariffs remain in effect and reciprocal tariffs scheduled to come back into effect in six weeks' time. Furthermore, the Federal Reserve is unlikely to alter its restrictive policy stance until there is greater certainty regarding tariffs, meaning demand for new homes is likely to remain constrained through the remainder of this year.
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