What first appeared to be a shaky start for housing starts in 2026 reversed course in March as home building activity unexpected rose, though forward-looking data underscores uncertainty across the new residential construction sector.
The U.S. Census Bureau reported Wednesday that single-family housing starts jumped to an annual pace of approximately 1.03 million in March, nearly 10% higher than February’s upwardly revised rate of 941,000.
Overall privately owned housing starts increased to a seasonally adjusted rate of slightly more than 1.5 million, a 10.8% gain on both a monthly and annual basis, according to government figures.
The chief economist of the National Association of Home Builders, Robert Dietz, has previously said he expects housing starts to decline annually in 2026, as they did in 2025.
Permit applications, as a forward-looking indicator of future housing starts, declined to a seasonally adjusted annual pace of approximately 1.37 million, 10.8% below the February rate of nearly 1.54 million. Permits in March were about 7.4% below year-ago levels, capturing the sector’s somewhat entrenched uncertainty amid macroeconomic volatility.
Single-family permits, meanwhile, fell to an annualized pace of 895,000, roughly 3.8% below the February pace of 930,000.
Experts across the residential construction sector say that beyond lower borrowing costs, slow purchase demand remains the constraint on expanded activity. But builders may be seeing demand for newly built homes firming despite ongoing affordability pressures as the spring homebuying season enters full swing.
New-home mortgage applications spiked in March, according to the Mortgage Bankers Association, coinciding with the unexpected jump in single-family starts. Applications were 11% higher in March than a year ago and 26% higher than February, which pushed the index to its highest level since its inception in 2012.
The MBA noted that new-home mortgage applications for government-insured mortgages backed by the Federal Housing Administration and Department of Veterans Affairs accounted for more than 50% of overall new-home applications volumes for the third consecutive month.
