New Home Construction Permits Rise 4.2% in Latest Data

Building permits for new privately-owned housing rose 4.2% in March to a seasonally adjusted annual rate of 1.47 million units, the U.S. Census Bureau and Department of Housing and Urban Development reported Thursday. The reading came in above the Bloomberg consensus estimate of 1.43 million and marked the strongest pace since November 2024.

Single-family permits drove the gains, rising 5.8% to an annual rate of 1.02 million. Multifamily permits for buildings with five or more units increased 1.1% to 450,000. On a year-over-year basis, total permits remain 2.3% below the March 2025 level, reflecting a sharper slowdown in multifamily activity.

Regional permit data showed the South gaining 6.3%, the West up 3.1%, and the Midwest advancing 2.0%. The Northeast posted the only decline, falling 1.8%. Texas, Florida, and North Carolina led among states for single-family permit volume. Texas issued 17,841 single-family permits during the month, the most of any state.

Housing starts also improved, climbing 1.9% to a seasonally adjusted annual rate of 1.32 million. Single-family starts rose 2.7% while multifamily was essentially flat. Completions came in at 1.48 million, down 5.1% from February but up 9.2% year-over-year as projects from the multifamily pipeline built in 2023 and 2024 continue to deliver.

Robert Dietz, chief economist at the National Association of Home Builders, said the March data is consistent with a cautious recovery in single-family construction. Dietz cited recent improvement in the NAHB Housing Market Index and noted that builders have reduced use of mortgage-rate buydowns as the purchase environment shows modest improvement.

Supply constraints remain a factor. The NAHB survey continues to flag elevated costs for framing lumber, which hit $565 per thousand board feet in the latest weekly reading, and persistent shortages of electricians and plumbers. The trade group estimates labor shortages add roughly $20,000 to the cost of a median new single-family home.

Public homebuilders reported mixed quarterly results this month. Lennar said its March gross orders rose 8%, while D.R. Horton reported that net sales orders came in at the high end of guidance. KB Home warned of margin pressure as it increased incentives to move inventory. D.R. Horton CEO Paul Romanowski told analysts the company expects single-family permit activity to continue modest gains into the second quarter.