U.S. Residential Starts Decline in January

Annualized residential starts declined in all categories in January.

Multifamily starts fell to 355,000 units in January, down 11% from December’s seasonally adjusted annual rates (SAAR), according to the latest report from the U.S. Census Bureau and the Department of Housing and Urban Development.

Meanwhile, single-family starts dipped 8.4% to 993,000 units. The small plex or 2-4-unit category saw their SAAR fall by almost 44% from last month to 18,000 units, bringing total residential starts down 9.8% from December to 1.366 million units.

Compared to one year ago, the SAAR for multifamily starts was up slightly (2.3%), while single-family dipped 1.8% and plexes were unchanged.

Residential permitting is more forward looking, and the trends indicate a continuing decline in multifamily construction and a level to upward trend in single-family development. January’s 12-month total (not seasonally adjusted) for multifamily permits declined 17.4% to 431,400 units, while annual single-family permits through January totaled 977,200 units, up 3.7% from last year.

Annualized multifamily permitting was virtually unchanged from last year at 427,000 units but was down 1.4% from 2024’s total. Single-family permitting was down 3.4% from last January and unchanged from December at 996,000 units.

The SAAR for completions was up from last January by 8.9% for single-family homes (to 982,000 units) and up 11.8% for multifamily (to 652,000 units). Both were up 7% to 10% month-to-month. There were 22.5% fewer multifamily units under construction than one year ago (751,000 units) and single-family units under construction were down 6.3% at 641,000 units.

Compared to one year ago, the annual rate for multifamily permitting increased sharply in the South region (up 22.2% to 219,000 units) and fell about as much in the West region (down 23.6% to 72,000 units). Permitting also declined for the year in the Northeast region (down 17.6% to 62,000 units) and Midwest region (down 4.2% to 74,000 units). Compared to the previous month, permitting was down in all but the South Census region.

Annualized multifamily starts increased in the Midwest region (up 71.1% to 39,000 units) and West region (up 21.2% to 115,000 units) but were down in the Northeast region (down 20.2% to 48,000 units) and in the South region (down 9.4% to 155,000 units). Compared to December’s SAAR, starts were up only in the West region.

This post is part of a series by RealPage Senior Real Estate Economist Chuck Ehmann analyzing residential permits and starts data from the U.S. Census Bureau. For more on this data, read previous posts in the Permits series.