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

Homebuilding activity weakened through October

• Housing starts fell 4.6% month-on-month (m/m) in October to 1.25 million (annualized) units, weaker than consensus expectations for 1.33 million units. This followed a 1.2% m/m uptick in September, but the three-month moving average was still down 4.2% in October.
• October's decline in housing starts was driven by a 22% decline in multi-family starts, while single-family starts rebounded by 5.4% after declining in the previous two months.
• Indicators for future homebuilding were also soft. Residential permits fell 0.2% m/m to 1.41 million annualized units in October. Permitting activity declined in the single-family segment (-0.5% m/m), but activity in the multi-family segment increased slightly (+0.2% m/m).
• Among the four Census regions, housing starts increased in the South (+1.3% m/m) and Midwest (0.5% m/m). Declines were recorded in the West (-21.9% m/m) and Northeast (-0.7% m/m).

Key Implications

• After a 3-month delay, today's update on homebuilding activity showed activity moderated heading into the fourth quarter of last year. The single-family sector improved for the first time in three months, but remained subdued through the second half of 2025, as elevated financing costs weighed on housing demand. The multi-family sector, though volatile, has seen construction increase through 2025, as the project pipeline has normalized from previously elevated levels.
• More timely data on homebuilder sentiment showed a modest improvement through December, as a gradual decline in mortgage rates aided new home sales. However, the sentiment index was 15% below year-ago levels in December, reflecting the continued challenges facing the industry. Tariffs on steel, aluminum, copper, and lumber have had a material impact on construction costs according to homebuilder surveys. While this will likely remain a headwind over the near-term, easing financial conditions should provide support to homebuilding moving through 2026.  

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