Housing News

The New Year Kicks Off with a Surge in Home Construction

Homebuyers are about to have more new homes to choose from.

Homebuilders kicked off the year by starting construction on more new residences, especially new condos and apartments.

Housing starts were up 7.2% in January from December, according to the latest U.S. Census Bureau and U.S. Department of Housing and Urban Development data. Builders began construction on 9.5% more homes in January 2026 than they did the same month a year ago.

That puts builders on pace to start work on 1.49 million new homes this year.

But while construction on multi-family units, which include condos and apartments, surged, starts on single-family homes declined. Construction fell on single-family homes by 2.8% month-over-month in January and starts were down by 6.5% compared to January 2025.

“The single-family market has slowed as builders continue to deal with elevated construction costs, while affordability conditions are a cause of concern for many potential homebuyers,” said National Association of Home Builders Chairman Bill Owens in a statement.

Some of the slowdown in single-family home construction may be due to winter storms that pummeled the Northeast this winter. Housing starts for these standalone homes dropped 33.3% from December to January.

“Some of the softness may reflect temporary disruptions,” said First American Deputy Chief Economist Odeta Kushi in a statement.

The good news for buyers is nearly 5% more homes were completed in January than in December, according to the government data. However, the number of finished homes was down about 7.5% year-over-year in January.

And the number of permits to put up new homes, an indicator of future new homes for sale, fell in January. Permits were down for January by 5.4% month-over-month and by 5.8% year-over-year, according to the data.

“While mortgage rates fell in January, affordability is still stretched, and single-family builders appear to be proceeding cautiously,” Kushi said in a statement.