The year’s shortest month showed a significant downturn in construction. At a seasonally adjusted and annualized rate, privately-owned housing starts came in at 1,501,000 in February—11.2% higher than in January.
This increase in privately-owned housing starts contrasted with a small drop year-over-year. According to the latest report on new residential construction—provided by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD)—there was a 2.9% decline from the 1,546,000 housing starts in February 2024.
Building permits also showed a decrease. The rate of permits came in at 1,456,000 for privately-owned housing units—down 1.2% month-over-month and 6.8% year-over-year.
Although weather may have hindered completions, growing concerns over tariffs are starting to have an impact on new starts and permitting activity, said Bright MLS Chief Economist Lisa Sturtevant.
“The situation is changing for many builders. The National Association of Home Builders (NAHB) reported that homebuilder confidence fell to its lowest level in seven months. Tariffs and general economic uncertainty are the drivers of that falling confidence,” Sturtevant said in a statement. “Consumers also are going to feel the impacts. According to NAHB, the Trump administration’s tariffs are projected to add $9,200, on average, to the final cost of a new home.”
This will make it a challenging year for homebuilders, warned Sturtevant, as homebuyers will have more choices as existing homeowners start selling.
Alongside the year-over-year drop in privately-owned housing starts, single-family housing starts increased 11.4% in February, at a rate of 1,108,000, compared with January’s figure of 995,000.
While solid demand and a lack of existing inventory provided a boost to single-family production in February, said NAHB Chairman and homebuilder Buddy Hughes in a press release, the latest builder survey reflects concerns about affordability—most notably elevated financing and construction costs as well as tariffs on key building materials.
Jing Fu, NAHB senior director of forecasting and analysis, also raised concerns about how the tariffs would affect housing affordability.
“Despite elevated interest rates and policy uncertainty, ongoing lean levels of single-family existing-home inventory helped to boost single-family production in February,” Fu said in a statement. “NAHB forecasts that single-family starts will remain effectively flat in 2025 as prospects of a better regulatory business climate are offset by uncertainty on the tariff front. Meanwhile, multifamily construction is expected to remain soft in early 2025 due to challenging financing conditions, before stabilizing in the second half of the year.”
Regional breakdown of housing starts
Building activity dropped significantly in the Midwest, with February showing a 24.9% decrease month-over-month and 44.4% year-over-year, seasonally adjusted.
On the opposite end, the Northeast had a 47.4% increase in housing starts from January and a 20.2% jump from February 2024.
In the South, February brought in 18.3% more housing starts than January but dropped 5.6% from last year.
The West experienced the largest year-over-year increase, with 26.2% more housing starts. From January, it jumped 5.9%.
Regional breakdown of building permits
The number of building permits issued in the Northeast during February 2025 showed the most dramatic falls, with a 15.3% monthly decrease, seasonally adjusted, and a 45.8% plunge from February 2024. Single-family home permits in the Northeast were up 1.6% monthly and 3.3% annually.
The West—also showing a decrease in authorized building permits—had a 7.6% drop from January 2025 and an 8.8% drop from February 2024. Similarly, single-family home permits declined 7.8% monthly and 4.9% annually.
Although the Midwest showed a sharp decline in housing starts, the region experienced an influx of new building permits, with an 8.9% jump month-over-month, and a 3% increase from February 2024. The region’s single-family home permits both experienced drops, with a 4.5% decrease from January 2025 and a 9.2% drop year-over-year.
The South showed a 1% increase in the amount of housing permits issued in February 2025 from the previous month, and a 1.5% increase from the previous year. For single-family units, the amount of building permits increased 3.7% from January 2025 and dropped 2.2% from February 2024.
Correction: A previous version of this story misstated the month-to-month housing starts change as a decrease.
