Single-Family Construction Activity Declines as High-Density Takes Off

As more builders turn to high-density housing options, single-family building permits fell at the tail end of 2025. According to a report from housing marketing platform Zillow, single-family permits reached 881,000 in December, down by 10.9% compared with December 2024. At the same time, however, building permits for the overall housing market increased by 4.3% to 1.448 million.

Single-family housing starts were also down year-over-year

While single-family housing starts increased by 4.1% from November to December, they were still down by 9% from a year ago. As of December, single-family housing starts reached 981,000. Meanwhile, the multifamily sector recorded an 18% increase in units started in 2025 for buildings with five or more units.

Why has single-family construction stalled?

By the end of 2025, housing became much more affordable, with both home prices and mortgage rates stagnating. Still, homebuyer activity remained muted, and in turn, many builders slowed down or paused new construction projects.