The boom is fading

U.S. residential permits are 19.4% below the pre-pandemic trend, a record gap in Zillow's analysis. The slowdown is hitting even as the country still lacks millions of homes.

“the thinner pipeline could mean a tighter market that drives up prices”

Sun Belt leads losses

Austin had the steepest drop among major markets, with permits down 25.3% year over year. San Antonio fell 24.1%, while Orlando, Charlotte and San Diego dropped roughly 20%.

Builders face a squeeze

Zillow says many boom markets now have more inventory, making new projects harder to justify. Builders also cite high construction costs, mortgage rates and fuel prices.

“Higher mortgage rates are keeping many prospective buyers on the sidelines”

Some cities still gain

The slowdown is not uniform. San Jose permits more than doubled, while Seattle, Birmingham, Los Angeles and San Francisco also posted gains from lower recent building levels.

Percentages need context

Los Angeles permits rose 30.6%, but it issued 34,696 permits over the year. Dallas and Houston each issued about 60,000, showing volume still matters more than the growth rate.

New homes shrink

Builders are finishing homes faster and making them smaller. The median detached home completed in 2025 was 2,300 square feet, down from 2,400 in 2019.

Completions keep falling

About 817,000 detached single-family homes were completed in 2025, down 2.5% from 2024. It was the third straight annual decline and the lowest total since 2020.

Policy cannot fix rates

The Trump administration has moved to reduce building rules, but borrowing costs remain high. Freddie Mac put the 30-year fixed mortgage rate at 6.76% on Sept. 10.