April residential construction data reflect a housing market still working through a structural affordability imbalance. In a period of resurgent inflation and slowing wage growth, Americans are seeking viable solutions to the ongoing affordability crunch during an uncertain spring season.
Permits rose 5.8% from March, driven by a 22.7% increase in multifamily units. Compared with last year, permits were 0.2% lower.
In the wake of last month’s jump, housing starts retreated 2.8% from a revised March number to 1.47 million annualized units, due to pullback in single-family activity. Meanwhile, multifamily starts picked-up by double-digits, a sign that builders continue to recognize demand for higher-density housing remains strong. Starts were 4.6% higher than a year ago, boosted by a 23.3% jump in buildings with five or more units.
Completed homes, ready for sale, increased 4.8% from March of this year, but were 2.0% below April 2025. The pace of multifamily completions was 16.5% higher than the prior month.
Builders understand the need to meet the pressing demand for affordable housing and recognize the opportunity that providing a compelling product can have on their bottom lines. However, that opportunity is constrained by a broad cost burden that extends well beyond financing, including land acquisition, zoning and permitting, environmental review, infrastructure requirements, labor, and construction materials. These pressures continue to complicate efforts to deliver new supply at price points the market increasingly needs.
The latest numbers point to a market that is adjusting rather than retreating. Single-family construction is still under pressure from mortgage rates and higher prices, while built-to-rent continues to gain traction as a practical middle ground. Multifamily development has cooled from its recent highs, but it remains an essential part of the solution in a country that still has far more housing demand than supply. The trends underscore how critical it is for policy makers to craft well-thought out legislation that avoids harming the very supply they aim to encourage or lead to unintended consequences down the road.
Buyers looking for new homes in this year’s spring market can expect mortgage rates to stay in the new normal range well above 6.0%. Given rising inflation and investors’ expectations for continued price increases, the 10-year Treasury pushed above 4.6% this week.
One silver lining for those looking for a deal is the 61% of builders who continue to offer incentives in order to incentivize transactions. In addition, 32% of construction companies reduced prices on new homes this month, working to clear existing inventory.