Residential construction in the United States statistics & facts

US residential construction at a glance

Residential construction is the largest single part of the US construction industry. According to the US Census Bureau, private residential construction spending reached 905.2 billion dollars in 2025, more than 40 percent of all construction put in place in the country. In August 2026 it was running at a seasonally adjusted annual rate of 882.3 billion dollars, 4.8 percent less than a year earlier. Builders started 1.36 million new homes in 2025 and completed 1.49 million, while local governments authorized 1.43 million new units through building permits.

The sector is in a slow patch. High mortgage rates, record construction costs and stretched affordability have pushed builder sentiment to its weakest level in a year, and the boom in apartment construction that followed the pandemic has run its course. At the same time, the United States is still short of millions of homes, according to every major estimate. This report brings together the key statistics on spending, housing starts, permits, completions, new home sales, builders, costs, remodeling and the housing shortage, and links to our detailed reports on each topic. For the wider industry, including commercial and public work, see our report on the US construction industry.

Residential construction spending

Spending on private residential construction grew rapidly after the pandemic. The Census Bureau put it at 544.4 billion dollars in 2019 and 628.9 billion dollars in 2020. As low mortgage rates and a rush for more space set off a building boom, spending jumped to 793.7 billion dollars in 2021 and 917.9 billion dollars in 2022. It dipped to 866.9 billion dollars in 2023 when interest rates rose, recovered to 929.5 billion dollars in 2024 and eased to 905.2 billion dollars in 2025, according to the preliminary annual estimate.

Up two-thirds since 2019: private residential construction spending rose from 544.4 billion dollars in 2019 to 905.2 billion dollars in 2025.

These figures are in current dollars, so part of the increase reflects higher costs rather than more building. Construction input prices have risen sharply since 2020, and the Joint Center for Housing Studies (JCHS) at Harvard University estimates that residential input prices are about 40 percent higher than at the start of 2020. In real terms, the volume of residential building has grown much less than the dollar figures suggest, as discussed in our report on the cost to build a house in the US.

Residential spending is made up of three parts: new single-family homes, new multifamily buildings and improvements to existing homes. In 2025, new single-family construction accounted for 419.6 billion dollars, or 46 percent of the total, improvements for an estimated 370.9 billion dollars, or 41 percent, and new multifamily buildings for 114.6 billion dollars, or 13 percent. The improvements figure is calculated as the residual, since the Census Bureau does not publish it as a separate line in its monthly tables.

Single-family homes lead: new single-family construction made up 46 percent of residential spending in 2025, improvements 41 percent and multifamily 13 percent.

How spending on the two types of new housing has developed since 2019 is covered in detail in our report on single-family vs multifamily construction.

Where residential spending stands in 2026

The most recent data point to a modest slowdown. In August 2026, private residential construction was running at a seasonally adjusted annual rate of 882.3 billion dollars, up from 872.7 billion dollars in July but 4.8 percent below August 2025. New single-family construction was running at 403.3 billion dollars a year, 3.5 percent less than a year earlier, and new multifamily construction at 115.8 billion dollars, nearly unchanged. Improvements, again calculated as the residual, fell the most, by about 7.4 percent to roughly 363.2 billion dollars.

Improvements and single-family down: single-family spending fell 3.5 percent in a year and improvements about 7.4 percent, while multifamily was nearly flat.

In the first eight months of 2026, private residential construction totalled 594.1 billion dollars, 4.1 percent less than in the same period of 2025. Residential work accounted for about 40 percent of all construction spending in August 2026, which ran at an annual rate of 2,203.1 billion dollars. The rest was private nonresidential construction, led by data centers, and public construction such as highways and schools. Residential investment also matters for the wider economy, as covered in our data on US GDP.

Two dollars in five: private residential construction made up about 40 percent of the 2.2 trillion dollars of US construction spending in August 2026.

Housing starts over two decades

Housing starts, the number of new homes on which construction begins, are the most closely watched measure of home building. According to the Census Bureau and the Department of Housing and Urban Development (HUD), builders started 2.07 million homes in 2005, the peak of the housing bubble. After the crash, starts collapsed to 554,000 in 2009, the lowest level in the modern series. It took more than a decade to recover: starts passed 1.2 million in 2017, reached 1.6 million in 2021 and have since settled at around 1.36 million a year. Our report on US housing starts and completions has the full detail.

Still well below the bubble peak: housing starts reached 2.07 million in 2005, fell to 554,000 in 2009 and stood at 1.36 million in 2025.

The mix of homes being built has changed over time. In 2025, single-family homes made up 939,700 of the 1.36 million starts, or 69 percent. Buildings with five or more units accounted for most of the rest. Multifamily starts peaked at 531,000 in 2022, during the post-pandemic apartment boom, before dropping to 336,200 in 2024 as financing costs rose and rents levelled off. They recovered to about 396,600 in 2025, according to the preliminary figures.

Permits, starts and completions in 2025

The construction pipeline runs from permits, which authorize a project, to starts and finally completions. In 2025, the Census Bureau counted 1.43 million units authorized by building permits, 3.1 percent fewer than in 2024. Starts fell slightly, by 0.8 percent, to 1.36 million. Completions dropped more sharply, by 8.5 percent to 1.49 million, after 2024 had brought the most completions since 2007 as the large wave of apartment buildings started in 2021 and 2022 was finished. Permit trends by state and metro are covered in our report on US building permits.

All three measures fell in 2025: permits dropped 3.1 percent, starts 0.8 percent and completions 8.5 percent.

The latest monthly data show the same cooling trend. In August 2026, permits were issued at a seasonally adjusted annual rate of 1,394,000, starts ran at 1,275,000 and completions at 1,128,000, 27.1 percent fewer than a year earlier. About 1.27 million homes were under construction, 3.2 percent fewer than a year before, and 280,000 had been authorized but not yet started. In the first eight months of 2026, starts were 1.0 percent below the same period of 2025 and completions 12.9 percent lower.

Behind these totals the two main types of housing are moving in different directions. Of the 1.27 million units under construction in August 2026, 589,000 were single-family homes and 666,000 were in buildings with five or more units. The multifamily figure is about a third below its peak of roughly one million units in July 2023, when the post-pandemic apartment wave was at its height. Of the 280,000 units authorized but not yet started, 148,000 were single-family homes and 128,000 were in larger buildings, a sign that some developers are holding back projects until financing conditions improve.

Where homes are being built

Home building is heavily concentrated in the South. In 2025, the South accounted for 721,400 of the 1.36 million housing starts, or 53 percent, according to the Census Bureau. The West followed with 299,800 starts, the Midwest with 198,600 and the Northeast with 136,000. The South also issued 54 percent of all building permits. Texas and Florida alone accounted for more than a quarter of all units authorized in 2025, with 210,217 and 178,297 permits respectively.

More than half in the South: the South accounted for 721,400 of the 1.36 million US housing starts in 2025.

The geographic pattern reflects population growth, cheaper land and lighter regulation in Sun Belt states, as well as the high cost of building in coastal cities. Dallas and Houston were the metro areas with the most permits in 2025, followed by New York, Phoenix and Atlanta. More on regional real estate trends is in our report on real estate development prospects in US cities.

New home sales, prices and sizes

Sales of newly built homes have held up better than sales of existing homes, partly because builders have offered mortgage rate buydowns and other incentives. In August 2026, new homes sold at a seasonally adjusted annual rate of 684,000, according to the Census Bureau. The median sales price was 393,700 dollars, 5.8 percent less than a year earlier, and there were 483,000 new homes for sale, equal to 8.5 months of supply at the current sales pace, a high level by historical standards.

For 2025 as a whole, the median sales price of a new single-family home was 417,400 dollars and the average 523,800 dollars. The Census Bureau counted 1,005,000 single-family homes completed in 2025, with a median size of 2,142 square feet, while the median new multifamily unit built for rent had 1,000 square feet. The differences between the two types of housing are covered in our report on single-family vs multifamily construction.

Two other segments are worth noting. Builders started 131,000 custom single-family homes on owners land in 2025, with a median contract price of 404,000 dollars, according to the Census Bureau. Built-for-rent single-family homes, constructed specifically to be rented out rather than sold, made up about 106,000 completions in 2025, or 11 percent of all single-family homes completed, according to the JCHS. Both segments show that the line between owning and renting is becoming less clear in new construction.

Jobs in residential construction

Residential construction is also a major employer. According to the Bureau of Labor Statistics, residential building contractors, the companies that build homes, employed 923,700 people in August 2026. Most of the actual work on homes is done by specialty trade contractors such as framers, roofers, electricians and plumbers, who together employed 5.28 million people across all types of construction. A shortage of skilled workers is one of the most persistent problems for home builders: in the latest NAHB survey, 61 percent of builders said the cost or availability of labor was a significant problem in 2025.

Wages have risen accordingly. Average hourly earnings for all construction employees reached 41.66 dollars in August 2026, up 4.2 percent from a year earlier. Because labor makes up a large share of the cost of building a home, rising wages feed directly into new home prices, alongside higher prices for lumber, steel and other materials.

The home building industry

Large public companies build a growing share of new homes. According to NAHB analysis of Builder magazine data, the ten largest builders accounted for 43.6 percent of new single-family home closings in 2025, compared with 18.7 percent in 2000. D.R. Horton and Lennar, the two biggest, each closed more than 80,000 homes and together accounted for about a quarter of all new single-family sales. Company-level data on revenue, closings, prices and margins are in our report on US homebuilders.

Builders are under pressure. The NAHB/Wells Fargo Housing Market Index, which measures builder confidence, fell to 32 in September 2026, well below the level of 50 that separates positive from negative sentiment. 38 percent of builders reported cutting prices, and 66 percent were using sales incentives. High interest rates, buyers waiting for prices or rates to fall and the cost of lots and labor were the most common problems builders reported, as detailed in our report on home builder challenges.

The cost of building a home

Construction now takes up a larger share of the price of a new home than ever before. In its latest Cost of Constructing a Home survey, the National Association of Home Builders (NAHB) found that construction costs averaged 428,215 dollars, or 64.4 percent of the average sales price of 665,298 dollars, the highest share since the survey began in 1998. The finished lot accounted for 13.7 percent, a record low, and builder profit for 11.0 percent. Prices of inputs to residential construction rose 7.8 percent in the year to August 2026, with softwood lumber up 13.0 percent, partly because of higher tariffs, as covered in our data on US tariffs. The full breakdown is in our report on the cost to build a house.

Remodeling and improvements

Improving existing homes has become almost as important as building new ones. The JCHS estimates that homeowners spent about 509 billion dollars on improvements and repairs in 2025 and projects spending of around 518 billion dollars by the end of 2026. With the US housing stock ageing, the median owner-occupied home is now more than 40 years old, and many owners choose to renovate rather than move and give up a low mortgage rate. See our report on home remodeling spending for the data.

The housing shortage

Despite more than a decade of rising construction, the United States does not have enough homes. Estimates vary widely depending on the method: Freddie Mac puts the shortage at 3.7 million units, Up for Growth at 3.78 million and Zillow at 4.7 million. Household growth slowed to about 1.1 million in 2025, according to the JCHS, while 1.49 million homes were completed, so the gap is narrowing slowly. Affordability remains a major problem, with home prices at 4.7 times household income in 2025 and a record 22.7 million renter households spending more than 30 percent of their income on housing. Our report on the US housing shortage compares all major estimates. Living costs more broadly are covered in our data on the US cost of living.

The latest Housing Vacancy Survey from the Census Bureau shows how tight the market still is. In the second quarter of 2026, the homeownership rate stood at 65.0 percent, the homeowner vacancy rate at 1.2 percent and the rental vacancy rate at 7.3 percent. There were 133.8 million occupied housing units, 1.2 million more than a year earlier, of which 87.0 million were owner-occupied and 46.8 million rented. The low homeowner vacancy rate means that few homes are sitting empty and available for sale, which keeps prices high even as sales slow.

Outlook for residential construction

The outlook depends above all on mortgage rates. Builder sentiment fell in September 2026 as rates and costs rose again, and single-family spending and starts have slipped below last year. Multifamily construction has stabilized after its sharp correction, but the number of apartments under construction is still about a third below its 2023 peak, which will keep completions low in 2026 and 2027. Construction costs are rising again, with input prices up 7.8 percent in a year, as covered in our data on the US inflation rate.

On the positive side, demand for housing remains strong. Household formation continues, the population is growing in the South and West, and the shortage of homes means that builders who can deliver affordable products will find buyers. Lower interest rates would quickly revive sales, while lasting tariffs on lumber, steel and other materials and a shortage of skilled workers would keep costs high. With remodeling spending near record levels, residential construction in the United States is likely to remain a business of close to 900 billion dollars a year.

For builders, the coming years will be shaped by a balance between strong long-term demand and difficult short-term conditions. The large inventory of 483,000 new homes for sale gives buyers bargaining power and is likely to keep incentives high. Builders who control land and can build smaller, more affordable homes are best placed, which is one reason the share of the largest companies keeps rising. For buyers and renters, the slowdown in completions in 2026 means that relief from high housing costs will come only gradually.

US residential construction in numbers

Frequently Asked Questions