Good real estate decisions start with knowing where the market is, but right now, we have an incomplete picture. Due to the 43-day government shutdown this fall, the Census Bureau has delayed reports on housing starts and new-home sales for September through November until January.
Until those numbers arrive, we are flying partially blind. However, even with the missing Q4 data, clear trends from earlier in 2025 allow us to forecast the road ahead.
The Story So Far
Data through August 2025 shows:
Overall, housing starts were up 0.7% year-to-date
Single-family starts were down 4.9%
Multi-family completions were up 17.5%
New-home sales were down 1.4% year-to-date
August sales alone were stronger year-over-year
In short, the data is mixed. Some areas are advancing while others are lagging.
Compared to a year ago, residential investment likely made up a smaller share of GDP through late 2025.
This change suggests that housing is no longer pushing economic growth the way it did right after the pandemic.
Inventory in Motion
There is also the question of inventory under construction.
Current estimates indicate:
About 611,000 single-family units under construction
About 706,000 multi-family units under construction
Roughly 1.317 million total units underway
This total of 1.317 million units is significantly higher than the pre-pandemic norm of 1.1 million.
This matters because while headlines shout 'shortage,' the construction pipeline tells a story of a backlog waiting to finish. Much of the pipeline has not yet reached the finish line.
Investors should factor that into expectations, especially when price arguments rely only on scarcity.
2026 Outlook
Based on the information available today, here's what could happen in the new year:
Multi-family starts will likely decline, a trend predicted by 40 straight months of negative architecture billings.
Single-family starts should remain flat as the market finds a floor
Total housing starts may edge lower
New-home sales are expected to hold steady, showing a 'wait-and-see' buyer sentiment.
The market is moving into a slower, more deliberate phase of recalibration.
The likely pressure point is multi-family development. This segment has absorbed higher rates, a construction spike, and weakening forward-demand indicators.
On the single-family front, activity appears steadier, even if it's not accelerating.
Investor Insights to Note
For the investor managing capital through cycles, the practical question is not “Where will prices go?” It’s: "How do I make decisions when signals are mixed?"
Respect the blind spot: Missing federal housing data poses a genuine risk. Any major capital allocation decisions made in Q1 should recognize that uncertainty; we don't know what we don't know until the January reports arrive.
Look past "Shortage" headlines: The elevated construction pipeline proves that supply is coming; it just hasn't all crossed the finish line. Be skeptical of price arguments that rely solely on scarcity.
Prepare for a "quiet" year: While many commentators look for a boom or a bust, the data points toward a middle ground. With multi-family activity softening and single-family activity flat, the theme is adjustment, not acceleration.
The Bottom Line
Housing is not collapsing, but it isn't racing ahead. The market is currently digesting years of aggressive building and adjusting to higher financing costs.
This environment rewards patience over prediction. With a blind spot in federal data and a massive construction pipeline still clearing, the priority for early 2026 is protecting capital and confirming the market floor, rather than chasing yield.
