U.S. Housing Starts In March Plunge As Costs And Uncertainty Stall Market

(MENAFN- The Rio Times) The U.S. Census Bureau and Department of Housing and Urban Development reported that new housing starts in March 2025 dropped 11.4% from February, reaching a seasonally adjusted annual rate of 1.324 million units.

This sharp decline surprised many in the market, as consensus expected a much smaller decrease. Single-family starts fell even more, down 14.2% to 940,000 units, while multifamily starts landed at 371,000.

Despite this setback, building permits for new homes increased 1.6% to 1.482 million, suggesting some builders still see opportunity ahead. However, single-family permits dropped 2% from the previous month, while multifamily permits rose 9.3%.

The number of homes and apartments under construction now stands at 1.4 million, the lowest since July 2021. Several factors drive this slowdown. Construction costs continue to climb, fueled by tariffs on imported materials and persistent inflation.



Since 2020, construction input prices have surged over 40%. In March alone, residential construction input costs rose 0.5%. Builders face higher prices for steel, wire, and lumber, which directly impact project viability.

Elevated mortgage rates also deter buyers, shrinking the pool of eligible customers. As a result, builder confidence has dropped. The NAHB /Wells Fargo Housing Market Index fell to 39 in March, its lowest level in seven months.

Many builders now question the profitability of starting new projects, especially as uncertainty over tariffs and regulations clouds the outlook.

While some regions, like the Midwest and Northeast, show resilience, the overall trend points to caution. The market waits to see if lower interest rates or policy changes can reverse the current slowdown and restore momentum.

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