Where home construction is rising — and falling

Single-family construction decreased in the U.S. in 2025, with regional variations highlighting "uneven" housing market growth occurring across the country, new reporting from the National Association of Home Builders found. 

Single-family starts totaled 939,182 in 2025, according to an analysis of data from the U.S. Census Bureau. The number reversed course, falling 6.9% from 2024 when builders began construction of just under 1.01 million homes, which reflected a rise in activity from the prior year.

Ongoing challenges that have hit the construction industry throughout the middle part of this decade all combined to thwart any homebuilding momentum, NAHB researchers said.

"Persistently high mortgage rates, elevated costs for builders and ongoing supply-side constraints continued to weigh on single-family construction in 2025," wrote Jing Fu, the association's senior director of forecasting and analysis. 

Regional divergences, though, show where markets of opportunity lie for buyers and builders. 

Three out of nine census divisions reported year-over-year increases in housing starts. While Midwestern and Mid-Atlantic markets saw new-housing activity come in higher, downward trends in the traditionally largest homebuilding regions of the Sun Belt more than offset the gains, NAHB said.

The South Atlantic division, primarily comprising several coastal states between Maryland and Florida, led the U.S. with 308,189 starts in 2025, representing approximately one-third of all volume. Activity declined 10.5% from the prior year's 344,313.

The West South Central region, which includes Texas, saw 171,247 starts, a year-over-year drop of 8.8% from 187,690. The third-most active area, the Mountain division, recorded 106,549 new single-family homes, a fall of 15.4% from 2024's 125,911 units. 

Collectively, the three busiest census divisions account for more than 60% of housing starts. 

Registering a year-over-year increase was the East South Central region, which reported a 13.7% annual rise to 62,674 last year from 55,111. The East North Central grew by 8% to 87,589 new housing units compared to 81,106, while the Middle Atlantic, consisting of New York and Pennsylvania, saw a 4% upturn to 42,328 from 40,681 starts.

"Overall, the 2025 SOC data points to a more uneven regional housing market than in 2024," Fu continued.

2026 trends point to further potential stress

NAHB's look back at 2025 construction arrives as continued pressure from geopolitical and economic events this year hits homebuilders' business outlook. In its last monthly industry survey, the association reported subdued sentiment among homebuilders, continuing a worrying trend that has now lasted over a year.   

While interest rates and trade wars factor into falling sentiment and restrained inventory, NAHB also pinned some of the blame on regulatory policy. 

"According to a new NAHB study, government regulation, taxes, fees and other costs add more than 26% to the price of an average single-family home. Easing permitting bottlenecks, density limits and inefficient zoning rules would help reduce costs and support the housing growth the nation needs," said Chief Economist Robert Dietz following release of the builder sentiment survey last month. 

Meanwhile, the supply price index tracking wholesale costs of materials for new residential construction increased this May by 4.4% on a year-over-year basis, the fastest pace since early 2023, NAHB also reported. 

Activity so far this year also had Fitch Ratings revise its new-home sales and housing starts forecast earlier this month. After predicting a small uptick in sales earlier this year, Fitch now expects them to fall 2.5% in 2026. 

Similarly, Fitch projected a 4.5% drop in single-family starts this year after previously predicting them to come in flat.