Housing Market Sees December Surge Despite Economic Challenges
The housing market ended 2024 on a strong note, with single-family construction rising in December despite ongoing economic pressures such as high mortgage rates, elevated financing costs, and a shortage of buildable lots.
According to a recent report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts surged by 15.8% in December, reaching a seasonally adjusted annual rate of 1.50 million units—the highest level since February 2024.
Single-Family and Multifamily Construction Trends
While single-family housing starts increased by 3.3%, reaching a 1.05 million annualized rate, the multifamily sector experienced a much sharper rise. Multifamily starts, which include apartment buildings and condominiums, jumped by 61.5% in December, hitting a 449,000-unit pace.
Despite this late-year boost, total housing starts for 2024 reached 1.36 million, marking a 3.9% decline from 2023’s total of 1.42 million. However, single-family construction showed resilience, with 1.01 million new starts in 2024—up 6.5% from the previous year. The National Association of Home Builders (NAHB) predicts that single-family homebuilding will see modest growth in 2025, driven by ongoing housing shortages and a strong economic backdrop.
In contrast, multifamily starts for 2024 saw a significant 25% drop from the previous year. As of December, there were 1.7 apartments completing construction for every new apartment breaking ground, signaling a slowdown in multifamily expansion. Experts anticipate that multifamily construction will stabilize in late 2025, supported by a low national unemployment rate and improving financial conditions.
Completions and Regional Trends
Single-family home completions in 2024 ended on a positive note, rising 2.2% compared to the previous year. Multifamily completions saw even stronger growth, rising 35% year-over-year, with two- to four-unit buildings (“missing middle” housing) increasing by 42.5%. This surge indicates a growing demand for medium-density housing, which could expand further with zoning reforms.
Regionally, combined single-family and multifamily starts for 2024 varied across the country:
- Northeast: +9.1%
- Midwest: -0.1%
- South: -5.2%
- West: -7.7%
Permits and Future Outlook
Building permits, which indicate future construction activity, declined by 0.7% in December to an annualized rate of 1.48 million units. Compared to December 2023, permits were down 3.1% overall, though single-family permits saw a slight 1.6% increase to 992,000 units. Multifamily permits dropped 5% to a 491,000-unit pace.
For the full year, total permits in 2024 reached 1.47 million, reflecting a 2.6% decline from 2023. However, single-family permits totaled 981,000—up 6.6% from the previous year, which is a positive indicator for 2025.
The number of single-family homes under construction stood at 641,000 in December, down 5.3% year-over-year. Meanwhile, the number of apartments under construction dropped 21% from the previous year, reaching 790,000 units. The multifamily pipeline peaked in July 2023 at 1.02 million units and has been steadily declining since.
Despite economic headwinds, the housing market showed resilience in December, with single-family home construction continuing its upward trajectory and multifamily completions reaching a high point. While 2024 saw an overall decline in total housing starts and permits, the steady growth in single-family construction and missing middle housing signals optimism for 2025. With ongoing demand and a persistent housing shortage, the market is expected to stabilize in the coming year.
