H
ousing construction is off to a strong start in 2025, but the road ahead is uncertain. According to recent census data, builders are optimistic about their prospects, with permits and housing starts increasing in December. Single-family home starts rose 3.3% from November to December, while building permits were up 1.6%. However, multifamily construction was down.

    Despite a strong year overall in 2024, there's still work to be done to meet demand. With over 1 million single-family starts last year, the second-highest number since 2007, homebuyers have more options. But economists warn that increasing construction is crucial to keep up with new demand and make up for decades of underbuilding.

    Uncertainties in 2025 could impact the industry, including potential tariffs on building materials and a labor shortage due to immigration policies. Additionally, mortgage rates hovering near 7% and affordability challenges may slow buyer traffic early in the year. Despite these headwinds, builder confidence edged up in January, but remains below levels seen last spring when optimism about lower mortgage rates was higher.