Housing starts increased in March, but according to a report by Zillow, falling new home prices and a rising resale inventory could keep builders sidelined.
Zillow said that building permits issued in March fell to 1,372,000, which is 10.8% below the revised February rate and is 7.4% lower than in March 2025.
Single-family permits were at a rate of 895,000 in March. This is 7.9% lower than the previous year.
Housing starts increased to 1,502,000 (SAAR) in March, up 10.8% from the revised February estimate and 10.8% higher than in March 2025, according to the U.S. Census Bureau.
Zillow said that single-family housing starts rose to 1,032,000 in March, 9.7% above the February estimate and 8.9% higher than in March 2025.
In fact, housing starts increased nationwide and in every region in March. Zillow noted that single-family homebuilding rose in February and surpassed year-ago levels.
Permits Were Below 2025 Levels
While the numbers show that builders are starting and finishing previously authorized construction on current building sites, permitting activity for future projects is below 2025 levels in March. Building permits fell for both single-family and multifamily construction, Zillow noted.
The online brokerage noted that rising competition from resale inventory could continue to weigh on new home sales as well as future building projects. It noted that rising construction costs and labor shortages also could temper new development.
Zillow said its data shows the median price per square foot for newly built homes was down 1.8% year over year in February.
Bankrate Principal Analyst Ted Rossman noted that the housing starts numbers were better than expected.
“Housing starts popped in March, beating expectations, but building permits plummeted,” Rossman said. “This foreshadows slower times ahead. The economic uncertainty exacerbated by Iran war impacts and lingering tariff concerns continues to weigh on the housing market.”
Rossman said that, “In most U.S. metros, the market has shifted in favor of homebuyers, with sellers and builders having to offer price cuts and other incentives to get deals done.”
