Single-family construction on the rise while multifamily development drops

The demand for single-family homes is rising, while the oversaturation of multi-family homes slows development. The National Association of Home Builders confirms the year-over-year growth for the single-family market, with the increase in Q2 adding to the gains posted in Q1. The new building permit count measures the development of both markets.

The U.S. West leads the multifamily decline with a 42% decrease in permits for that sector, closely followed by the Northeast and Midwest. 

The Builders’ Association reports that more than 900,000 apartments are currently under construction in the U.S., marking the most since 1973. With that comes a recent decrease in multifamily permits after a boom that sparked during the pandemic. The slowdown in permits can also be attributed to more stringent financing for multifamily home buyers.

According to CoStar analytics, multifamily permits dipped by 63% to 67,000 over the prior 12 months. Development dipped even further to 58,000 units in the following quarter, making it the lowest quarterly total since 2011. 

The builder’s group noted that single-family and multifamily construction companies are sifting through labor shortages and supply chain issues. Increases in mortgage rates in recent years have sliced the demand from new buyers. The Federal Reserve has signaled a decrease in mortgage rates this month, but there’s no indication that multifamily permits will see an increase soon. 

The single-family construction market appears to be stable in demand due to lower mortgage rates.

1 comment

Share Your Thoughts

Stainless steel recycling: A sustainable choice for the AEC industry

April 24, 2025

Stainless steel recycling is key for sustainability in construction. Stainless steel recycling gives new life to appliances, pipes, and fixtures while reducing waste.

Read more

Oracle bets big on generative AI agents to build the future

April 24, 2025

Oracle’s move to integrate agentic AI into construction processes is a bold step to improve technology adoption and reduce overhead costs.

Read more

Inside the construction industry’s battle with mental health

April 23, 2025

Mental health issues are common in construction, but there are effective ways to address risk factors and take action to support mental well-being.

Read more

9 powerful biohacks every construction pro needs to boost energy and longevity

April 23, 2025

Combat workplace stress and fatigue with biohacks like NAD+ supplements to repair cells and contrast therapy to improve recovery.

Read more