New construction starts experienced a significant slowdown in March, as reported by the Department of Housing and Urban Development and the U.S. Census Bureau This Week in Real Estate. Homebuilders are grappling with increasing price volatility of building materials and concerns over tariffs. On average, suppliers have raised their prices by 6.3% due to announced, enacted, or anticipated tariffs, resulting in an estimated cost impact of $10,900 per home. Despite the economic uncertainty, builder confidence edged up by one point in April compared to March. The Mortgage Bankers Association noted a 5.5% year-over-year increase in purchase mortgage applications for newly constructed homes in March. Additionally, single-family home prices rose by 5.2% in Q1 compared to the same time period prior year. Below are key events from the third week of April impacting our business:
HOME PRICE GROWTH REMAINS STEADY IN FIRST QUARTER. Single-family home prices increased 5.2 percent from Q1 2024 to Q1 2025, largely unchanged from the previous quarter’s year-over-year growth pace of 5.3 percent, according to the latest reading of the Fannie Mae Home Price Index (FNM-HPI). On a quarterly basis, home prices rose 1.4 percent in Q1 2025 on a seasonally adjusted and non-seasonally adjusted basis. Read the full story here.
HOUSING STARTS DECLINE AMID ECONOMIC UNCERTAINTY. Overall housing starts decreased 11.4% in March to a seasonally adjusted annual rate of 1.32 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Within this overall number, single-family starts decreased 14.2% to a 940,000 seasonally adjusted annual rate over the month and are down 9.7% compared to March 2024. On a year-to-date basis, single-family starts are down 5.6%. The multifamily sector, which includes apartment buildings and condos, decreased 3.5% to an annualized 384,000 pace. On a year-over-year basis, multifamily construction is up 48.8%. The total number of single-family homes and apartments under construction was 1.4 million in March. This is the lowest total since July 2021. Total housing units now under construction are 15.2% lower than a year ago. Single-family units under construction fell to a count of 632,000 – down 8.7% compared to a year ago. The number of multifamily units under construction has fallen to 759,000 units. This is down 20.0% compared to a year ago. Overall permits increased 1.6% to a 1.48-million-unit annualized rate in March. Single-family permits decreased 2.0% to a 978,000-unit rate. Multifamily permits increased 9.3% to a 504,000 pace. Read the full story here.
MARCH NEW HOME PURCHASE MORTGAGE APPLICATIONS INCREASED 5.5%. The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2025 shows mortgage applications for new home purchases increased 5.5 percent compared from a year ago. Compared to February 2025, applications increased by 14 percent. “Applications for new home purchases increased in March, consistent with typical seasonal patterns and supported by mortgage rates that had been drifting lower,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 629,000 units in March 2025. The seasonally adjusted estimate for March is a decrease of 0.8 percent from the February pace of 634,000 units. On an unadjusted basis, MBA estimates that there were 61,000 new home sales in March 2025, an increase of 7 percent from 57,000 new home sales in February. Read the full story here.
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