Even as the new construction market for housing continues to struggle the results from February were better than expected.
The new numbers are in from the U.S. Census Bureau and the Department of Housing and Urban Development and they are encouraging compared to the previous month.
Privately owned housing starts were 1,501,000, an 11.2 percent gain over the revised January estimate of 1,350,000. Single-family starts also registered a big gain, up 11.4 percent over the prior month to 1,108,000 units. Both results however were still off from February 2024 indicating the market remains down from a year ago even as it appears to be gaining strength going into 2025.
The Northeast showed the largest gain, with a 47.4 percent month-over-month increase in total starts and a 75 percent jump in single-family builds. Every other region of the country with the exception of the Midwest – which was down 24.9 percent in total starts and 25.6 percent in single-family construction – also showed gains.
“Despite elevated interest rates and policy uncertainty, ongoing lean levels of single-family existing home inventory helped to boost single-family production in February,” said Jing Fu, the National Association of Home Builders senior director of forecasting and analysis. But he also cautioned that 2025 would still be a tough year for builders.
“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.”
Even with those cautionary words, builders have to look at February’s results as good news for the new year.
