Single-Family Home Construction Rises in December Despite Higher Mortgage Rates

Construction of single-family homes rose last month despite pressure on the housing market from higher mortgage rates.

Single-family housing starts, which account for the vast majority of all homebuilding, rose 3.3% in December from the prior month to a seasonally adjusted annual rate of 1,050,000, the U.S. Census Bureau reported Friday.

Total housing starts, including multifamily units, were at 1,499,000 annualized last month—up 15.8% from November. However, that figure was down 4.4% from a year earlier.

For all of 2024, an estimated 1,364,100 housing units were started—a decline of 3.9% from the 2023 figure of 1,420,000. Completions, on the other hand, rose 12.4% from the prior year to 1,627,900 total units finished in 2024.

“While new construction picked up between November and December, there are still headwinds in the homebuilding sector,” says Bright MLS Chief Economist Lisa Sturtevant.

“As the new presidential administration takes office, there is still a lot of uncertainty around policies that have a direct impact on the homebuilding sector, including tariffs and immigration. Strong economic growth has led to higher inflation and borrowing costs, which has also created challenges for builders,” she adds.

Northeast leads the nation in construction growth

Single-family housing starts rose the most last month in the Northeast, where they climbed 14.3% from November and 8.5% from a year earlier.

On a monthly basis, single-family starts rose 8.3% in the Midwest and 7.1% in the West, after accounting for seasonal adjustments.

Although the South remained the construction juggernaut with 617,000 single-family homes started last month, the most of any region, that figure was flat from November and down 1.8% from a year ago in a sign of slowing momentum.

Permit data shows builder uncertainty

Permits, a sign of future construction activity, declined overall in December, driven by reduced permitting for multifamily properties.

However, single-family permits rose 1.6% from the prior month—a sign that builders are still working to address the nation’s chronic housing shortgage.

Total permits for 2024 were 1.47 million, a 2.6% decline from the 1.51 million total from 2023. But single-family permits totaled 981,000 for the year, up 6.6% from the previous year, in a positive sign for 2025.

“This result speaks to some uncertainty holding strong among builders, who have worked hard in 2024 to finish projects and get new homes online, but are holding back from pushing new projects into the murky landscape of construction in 2025,” says Realtor.com® Senior Economist Joel Berner.

“Questions about the policy initiatives of the incoming Trump administration, which has promised tariffs on imported goods that include construction materials and mass deportations that will impact builders’ labor forces, surely have come into play as builders slow down in terms of initiating new building projects,” he adds.

2024 ends as strong year for single-family construction

Single-family starts totaled 1.01 million in 2024, up 6.5% from the previous year. Single-family completions ended 2024 up 2.2%.

Overall, 1,627,900 new homes hit the market last year, making it the strongest year for total completions since 2006. Single-family completions totaled 1,020,600 for 2024, tied for the best year since 2007.

“Buyers should take notice of the strong completions number for 2024 as a whole,” says Berner. “Buyers who have been frustrated with the stock of existing homes for sale may find that new builds offer them more affordable options for brand-new homes.”