New Home Construction & Building Permits: 2025‑2026 Outlook
Indicator Overview: Housing starts and building permits reflect builder sentiment and future supply. According to Fannie Mae’s December 2025 forecast, total housing starts are projected to fall to 1.34 million units in 2025 before gradually rebounding. Multifamily starts have cooled more sharply than single‑family construction.
Six‑Month Trend: Construction activity remained subdued through late 2025 amid high financing costs and elevated materials prices. Builders focused on clearing backlogs rather than initiating new projects.
Six‑Month Forecast: As borrowing costs ease, single‑family starts are expected to slowly recover. Permits may rise by 5‑7 % in early 2026, though labor shortages and supply‑chain challenges could restrain growth.
Note: The 6‑month trends chart is included on the Real Estate Market Indicators page. Please view there for the latest chart.
