• Building permits issued in January fell to 1,376,000 (SAAR). That’s 5.4% below the revised December rate and is 5.8% lower than in January 2025. Single-family permits were at a rate of 873,000 in January. This is 11.6% lower than the previous year.
• Housing starts increased to 1,487,000 (SAAR) in January, up 7.2% from the revised December estimate and 9.5% higher than in January 2025, according to the U.S. Census Bureau.
• Single-family housing starts fell to 935,000 (SAAR) in January, roughly 2.8% lower than the December estimate but still 6.5% lower than in January 2025.

What happened: Housing starts increased for the third consecutive month with most of the increase coming from multifamily housing. Multifamily starts increased most in the Northeast and the South. Single-family homebuilding fell in January and began the year below the 2025 level. The large drop in permitting activity points to a further decline in residential construction in the year ahead. 

Rising competition from resale inventory could continue to weigh on new home sales in 2026.  Zillow expects resale inventory to increase by 2.9% in 2026, following a 17% increase in 2025 that helped tame price growth.

What Zillow Senior Economist Orphe Divounguy says:  “While the uptick in new construction at the start of the year offers a modest boost of optimism, permitting activity is still below year-ago levels. Single-family homebuilding activity remains weak. With home values expected to remain somewhat flat, the combination of higher costs and increased competition from resale inventory is keeping many builders on the sidelines.”