According to new research from Zillow, the homebuilding slowdown that's been going on for a while now shows no signs of letting up as we head into 2026. Single-family home completions fell for the third year in a row in 2025, and the permitting numbers, which give us a window into what builders are planning to construct going forward, tell a similar story of retreat.
When you look at the raw numbers, residential permits issued over the past year totaled around 1.42 million nationwide, down slightly from the prior year. But the bigger picture is even more sobering. Compared to where permitting would have been if the pre-pandemic growth trend had continued, we're running almost a fifth below that projection. We've now seen year-over-year permit declines for forty-two consecutive months straight, which puts us at the lowest point relative to that pre-pandemic trajectory since the pandemic started.
The geographic picture is pretty telling. The Sun Belt markets that really led the building boom during the pandemic, places like San Antonio, Austin, Las Vegas, and Orlando, are now pulling back significantly as they work through excess inventory. Meanwhile, expensive coastal markets where building has been restricted for years are actually permitting more homes, though from a much smaller base. San Jose and Los Angeles are among the metros seeing increased permit activity.
Looking at what actually got built in 2025, those single-family completions dropped again, though the roughly 817,000 homes finished still exceed what was completed back in 2019. We are seeing one genuine positive here: builders are completing homes faster now that pandemic-related supply chain issues have eased. The median single-family home took six months from start to finish in 2025, down from seven months at the height of the crunch.
The homes being completed are also trending a bit smaller than before the pandemic. The typical newly finished detached home came in around 2,300 square feet in 2025, compared to about 2,400 before the pandemic hit. Attached homes similarly ran smaller. This reflects the reality that land constraints and cost pressures are pushing builders toward more efficient floor plans and smaller lot sizes in many regions.
What I am seeing locally in the Bay Area and East Bay is that this national pullback mirrors what's happening in our own market. The fact that San Jose is among the metros increasing permits while so many other major markets are declining tells me there's still genuine demand here, even as affordability remains stretched. The housing shortage that started all this building surge remains unsolved across the country, which means the long-term affordability challenge isn't going anywhere soon.
