Housing starts slumped in January

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development have released the latest data on housing starts, and bright spots are few and far between.

Privately-owned housing starts in January 2025 clocked in at 1,366,000, which is 9.8 percent below the revised December estimate of 1,515,000. It's also slightly lower (0.7 percent) under the January 2024 rate of 1,376,000. 

Single-family housing starts also slumped in January, coming in at 993,000. That figure is 8.4 percent below the revised December number of 1,031,000 and also under January 2024's total of 1,054,000.

There's no shortage of factors for the dip.

"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 NAHB. “The uncertain policy environment in terms of a better regulatory climate and impending tariffs offers both upside and downside risks in the near-term.”

Just one region, the West, saw an uptick of both total starts (+42.3 percent) and single-family starts (+24.9 percent). Every other region saw decreases in starts from the previous month. The Northeast and South were especially sluggish in January, with month-over-month total starts dropping 27.6 and 23.3 percent, respectively. Single-family starts were also down 14.5 percent in the Northeast and 19.2 percent in the South. 

Looking ahead, there is hope that a reduction of red tape and regulations will pave the way for a building bounceback. 

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