Constrained housing affordability conditions due to ongoing , elevated interest rates led to a reduction in single-family production to start the new year .

Overall housing starts decreased 9.8 % in January to a seasonally adjusted annual rate of 1.37 million units , according to a report from the U . S . Department of Housing and Urban Development and the U . S . Census Bureau .

The January reading of 1.37 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months . Within this overall number , single-family starts

decreased 8.4 % to a 993,000 seasonally adjusted annual rate ; the January pace was 1.8 % lower than a year ago . The multifamily sector , which includes apartment buildings and condos , decreased 13.5 % to an annualized 373,000 pace .

“ As mirrored in our latest builder survey , high construction costs , elevated mortgage rates and challenging housing affordability conditions are causing builders to approach the market with caution ,” said Carl Harris , chairman of the National Association of Home Builders ( NAHB ) and a custom home builder from Wichita , Kan . “ The uncertain policy environment in terms of a better regulatory climate and impending tariffs offers both upside and downside risks in the near-term .”

“ The single-family home building market is facing competing concerns and opportunities for 2025 ,” said NAHB Chief Economist Robert Dietz . “ Given persistent affordability concerns , reducing inefficient regulatory costs would offer the best policy path to improve attainable housing supply and bring down shelter inflation .”

On a regional basis compared to the previous month , combined single-family and multifamily starts are 27.6 % lower in the Northeast , 10.4 % lower in the Midwest , 23.3 % lower in the South and 42.3 % higher in the West .

Overall permits increased 0.1 % to a 1.48 million unit annualized rate in January . Single-family permits were at a 996,000 annual unit rate , remaining unchanged

compared to the previous month . Multifamily permits increased 0.2 % to an annualized 487,000 pace .

Looking at regional permit data compared to the previous month , permits are 6.1 % lower in the Northeast , 1.8 % higher in the Midwest , 0.1 % lower in the South and 2.3 % higher in the West .

The number of single-family homes under construction in January is down 6.3 % from a year ago , to 641,000 units . The number of multifamily units under construction is down 22.1 % from a year ago , to 768,000 units .

There were 669,000 multifamily completions in January , up 11 % from January 2024 . For each apartment starting construction , there are 1.8 apartments completing the construction process .