Elevated construction costs and constrained affordability conditions led to a reduction in single-family housing starts in January.

However, led by solid multifamily production, overall housing starts increased 7.2% in January to a seasonally adjusted annual rate of 1.49 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 1.49 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 2.8% to a 935,000 seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 30% to an annualized 552,000 pace.

“The single-family market has slowed as builders continue to deal with elevated construction costs while affordability conditions are a cause of concern for many potential home buyers,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Worthington, Ohio. “Weather effects also likely depressed single-family construction in the Northeast, where single-family starts were down 33% from December 2025 and down more than 6% compared to January 2025 readings.”

“Permit data indicates ongoing weakness for single-family construction given the affordability crisis,” said NAHB Chief Economist Robert Dietz. “Meanwhile, volatile multifamily construction surged to what appears to be an unsustainable high annualized pace of 552,000 units. However, this data may be revised lower in future revisions. Furthermore, prior NAHB analysis of the geography of permit data has shown gains for apartment construction occurring in lower density areas, such as exurbs, secondary cities and small towns.”

On a regional basis compared to the previous month, combined single-family and multifamily starts were 47.4% higher in the Northeast, 10.8% lower in the Midwest, 11.4% higher in the South and 7.5% lower in the West.

Overall permits decreased 5.4% to a 1.38 million unit annualized rate in January. Single-family permits decreased 0.9% to an 873,000-unit rate, which is the weakest reading since August of last year. Multifamily permits decreased 12% to an annualized 503,000 pace.

Looking at regional permit data compared to the previous month, permits were 9.6% lower in the Northeast, 9% higher in the Midwest, 3.5% lower in the South and 15.7% in the West.

The number of single-family homes under construction fell back to 582,000 in January, down 8.8% year over year as the single-family home building market has slowed. Despite recent gains for apartment construction, the number of apartments under construction has fallen back to 686,000 units, a 10% decline from January 2025.