The Latest Data on Housing: Starts Up, Building Permits Down

By SBE Council at 12 March, 2026, 6:09 pm

by Raymond J. Keating -

Housing plays a big part in the U.S. economy, and in turn, small business is the dominant player when it comes to housing construction.

In fact, based on the latest (2022) data from the U.S. Census Bureau:

● 92.1 percent of employer firms in the residential building construction sector have fewer than 10 employees

● 97.2 percent have fewer than 20 workers

● 99.7 percent have fewer than 100 employees

As is the case with so much in our economy currently, data that captures what was going on one or two months ago feels even more dated given the war with Iran. That being the case, let's look at what we currently do have on the housing front.

The latest residential construction report from the U.S. Census Bureau pointed to a split in the housing market.

Good News on Housing Starts

Privately-owned housing starts registered 1,487,000 at a seasonally adjusted annual rate, which was up by 7.2 percent compared to December 2026, and showed growth of 9.5 percent compared to January 2025.

As noted in the following chart, while declining since April 2022, housing starts have moved up over the last three months of data.

Source: Federal Reserve Bank of St. Louis, FRED

Building Permits Down

The negative for January was that building permits (i.e., an indicator of future housing starts), which came in at a seasonally adjusted annual rate of 1,376,000, was down by 5.4 from December and by 5.8 percent versus January 2025. Indeed, the general trend on permits, as noted in the following chart, the outlook for future starts becomes more troubling.

Source: Federal Reserve Bank of St. Louis, FRED

On the broader economy and policy fronts, there are factors working against housing, including uncertainty on energy costs, inflation, and interest rates, along with increased cost tied to tariffs. Moreover, regulatory costs and burdensome permitting rules are longstanding barriers that undermine the market.

There's good news in that area, as Congress is moving legislation to reduce such barriers. But policy needs to stay away from specific actions that bring federal government control into the market - such as micromanaging or banning institutional investor participation in housing - which would negatively impact needed sources of capital. Such an intrusion would harm supply and therefore undermine intended "affordable housing" outcomes.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of " The Weekly Economist " book series, and 10 Points from Walt Disney on Entrepreneurship .