HUD and the US Census Bureau reported monthly increase in multi-family homes started in the latest residential construction report released Wednesday, which boosted the overall level of new residential projects. The Feb. 18 report also contains initial housing project numbers for November, which were not previously released.
Building starts with five or more units rose 10.1% month over month in December, the highest level since 2025, but fell 1% year over year to a seasonally adjusted rate of 402,000. That number also represents an increase from November’s 365,000 apartment starts.
Combined housing starts came in at a seasonally adjusted annual rate of 1.4 million in December. This is a 6.2% increase from November, driven by strength in the West, and a 7.3% decrease compared to the same period last year. In November, they increased by 3.9% compared to October.
Single-family homes started at 909,600 in 2025, down 7.4% year-on-year. In total, in 2025, it is estimated that 1.4 million housing starts were started, a decrease of 0.6% compared to 2024.
There was no real recovery in the housing market by 2025, according to Matthew Nestler, senior economist at financial services firm KPMG.
“Despite an increase in starts and permits at the end of the year, builders continue to struggle with rising construction costs, economic and rate uncertainty and hesitant buyers,” Nestler wrote on LinkedIn. “We expect residential investment to remain weak this year; falling interest rates in the back half will help stimulate the sector.”
Nestler also noted that January and February 2026 numbers could be weak due to unusually bad winter weather in the South, the nation’s largest housing market.
In recent earnings calls, leaders of major REITs cited decrease in the delivery levels of apartment projects and the high absorption of existing units as reason for optimism this year. They hope the tighter supply will allow them to raise rents, although the economy and labor environment remain major concerns.
Multifamily project completions did fall compared to the same period last year: developers completed 483,000 annualized apartments in buildings of five or more units, down 15.9% year-over-year but up 7.1%.
There were 670,000 apartments in buildings of five or more units that were actively under construction in December, down 12.9% from the same period last year and down 2.3% from November.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
