Single-family housing starts fell in April, but multifamily gained momentum

Housing starts increased in April compared with a year ago, but a deeper dive into the data reveals that this uptick was driven by a noisier boost in multifamily development activity, while single-family starts declined. 

According to the U.S. Census Bureau’s new residential construction data released on Thursday, housing starts, on a seasonally adjusted basis, ticked up 4.6% year-over-year but fell 2.8% from March. 

Single-family starts were down 2.4% year over year, but strength in the multifamily sector, which saw starts increase by 23.3%, kept new residential construction positive. At a seasonally adjusted annual rate, housing starts were 1,456,000 units, 930,000 of which were single-family homes. 

“Housing starts pulled back in April following March’s rebound, but the overall report still outpaced consensus expectations and does not suggest a sharp deterioration in construction activity,” First American Deputy Chief Economist Odeta Kushi said in a provided statement.

The fall-off in single-family starts and permits, both sequential and year-over-year, is not viewed entirely as a negative, especially in light of homebuilders having to crush their margins to buy sales and work through oversupplies in some of the nation’s most-active new-home markets.

“We continue viewing reduced SF Starts a positive as excess channel supply still needs to be absorbed, particularly at entry-level price points,” writes Trevor Allinson, Wolfe Research homebuilding and building products research analyst in an investors note following today’s Census release. This way, “pricing can stabilize to begin ticking upward and improving consumer confidence.”

A closer look at regional trends provides additional insight.

Regional trends

Total housing starts were negative in each region, other than the West, which ticked up 49%. The Midwest (-9.6%), the South (-3.2%) and the Northeast (-3.2%) all experienced declining new residential activity. 

Single-family housing starts, on a seasonally adjusted annual rate, fell most prominently in the Northeast (-33.3%) and the Midwest (-12.1%). On the other hand, single-family starts were positive in the West (8.3%) and in the South (1.7%).

However, this momentary increase in single-family starts in the West and the South won’t necessarily translate into positive momentum for the remainder of the year. The number of single-family permits authorized in April was negative in every region, including the South (-1.9%) and the Midwest (-3.2%), indicating that starts for the foreseeable future could be negative. 

Kushi argued that the latest Census data “continues to reflect a homebuilding market defined more by caution than confidence”, adding that “single-family construction activity could remain subdued in the months ahead.”

The Northeast and Midwest have generally seen much stronger growth in housing starts over the past 18 months, largely because those regions avoided an earlier wave of aggressive homebuilding and still face limited housing supply. On the other hand, many booming Sun Belt markets had to work through excess inventory created by a surge in speculative development in the years following the COVID pandemic.

The South and West were challenging regions for single-family starts last year, with yearly declines of 8.4% and 10.7% in 2025, respectively, both higher than the national decline of 7.3%. Meanwhile, housing starts in the Northeast and Midwest were relatively unchanged.

A market in correction

The number of single-family homes under construction remains well below the post-COVID-era peak. In May 2022, there were 827,000 single-family homes under construction, but that number has steadily declined since, falling to 588,000 in April. Compared with a year ago, there are nearly 7.0% fewer homes under construction.

“Completions of single-family homes have slowed to an annual rate of about 903,000 units, reflecting ongoing challenges in the residential construction sector,” writes Danushka Nanayakkara-Skillington, Assistant Vice President for Forecasting and Analysis at the National Association of Home Builders. “This marks a 7.0% decline from a year earlier.”

Census data reveals that this slowdown in new home construction coincided with a decline in for-sale inventory. At the end of March, the number of newly built homes for sale nationwide was down 4.6% from a year earlier, while months’ supply fell to 8.5 from 9.2 a year ago.

Despite this decline in for-sale inventory, the median price of new homes fell 6.2% year over year and 5.3% on a monthly basis in March. Builders heavily relied on incentives to compensate for hesitant buyers facing higher mortgage rates, economic uncertainty and rising inflation. 

In February, the NAHB forecasted a modest 1.0% increase in single-family housing starts for 2026. It’s not yet clear how builders may react if the conflict in Iran persists indefinitely.

However, NAHB’s latest builder confidence index indicates that homebuilders are feeling more confident in May than they did the month before, despite a host of building products suppliers announcing price hikes.