The two metropolitan areas with the highest value of new residential construction in 2024 were in Texas. Those two areas, Dallas-Fort Worth-Arlington and Houston-Pasadena-The Woodlands, were the only ones in the United States where new homes authorized were worth over 17 billion U.S. dollars. Those figures were significantly higher than the following entries in the list, the areas around Phoenix (Arizona) and in New York, where home construction amounted to over ten billion U.S. dollars.

In the first quarter of 2025, San Francisco, Chicago, New York, and Honolulu were some of the U.S. cities with the highest housing construction costs. Meanwhile, Phoenix had one of the lowest construction costs for high-end multifamily homes at 190 U.S. dollars per square foot and Las Vegas for single-family homes between 240 and 480 U.S. dollars per square foot. Construction cost disparities As seen here, the construction cost for a high-end multi-family home in San Francisco in the first quarter of 2024 was over twice more expensive than in Phoenix. Meanwhile, there were also great differences in the cost of building a single-family house in New York and in Portland or Seattle. Some factors that may cause these disparities are the construction materials, installation, and composite costs, differing land values, wages, etc. For example, although the price of construction materials in the U.S. was rising at a slower level than in 2022 and 2023, several materials that are essential in most construction projects had growth rates of over five percent in 2024. Growing industry revenue Despite the economic uncertainty and other challenges, the size of the private construction market in the U.S. rose during the past years. It is important to consider that supply and demand for housing influences the revenue of this segment of the construction market. On the supply side, single-family home construction fell in 2023, but it is expected to rise in 2024 and 2025. On the demand side, some of the U.S. metropolitan areas with the highest sale prices of single-family homes were located in California, with San Jose-Sunnyvale-Santa Clara at the top of the ranking.

Graph and download economic data for New Privately-Owned Housing Units Under Construction: Total Units (UNDCONTSA) from Jan 1970 to May 2025 about construction, new, private, housing, and USA.

Housing Starts in the United States decreased to 1256 Thousand units in May from 1392 Thousand units in April of 2025. This dataset provides the latest reported value for - United States Housing Starts - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Residential Construction Market Outlook

The global residential construction market size was valued at $XX billion in 2023 and is projected to reach $XX billion by 2032, growing at a compound annual growth rate (CAGR) of XX% during the forecast period. This considerable growth is driven by several factors, including increasing urbanization, rising disposable incomes, and government initiatives focused on housing development. The expanding population, especially in emerging economies, and the growing trend toward nuclear families are also crucial drivers bolstering the market's growth.

One of the primary growth factors for the residential construction market is the rapid urbanization observed worldwide. As more people move from rural areas to urban centers in search of better employment opportunities and improved living standards, the demand for residential units in cities has skyrocketed. Urbanization not only increases the demand for new housing but also necessitates the renovation and upgrading of existing infrastructure to accommodate the growing population. Additionally, governments around the world are implementing policies and offering incentives to stimulate the housing sector, thus directly contributing to market growth.

Another significant driver is the rise in disposable incomes, especially in developing nations. Higher disposable incomes enable individuals and families to invest in better housing, resulting in increased demand for residential construction. Economic growth in various regions has led to a higher standard of living, with more people aspiring to own homes that offer enhanced comfort and amenities. This trend is complemented by the availability of favorable financing options and mortgage rates, which make home buying more accessible to a larger segment of the population.

Technological advancements in construction techniques and materials are also playing a pivotal role in the market's growth. Innovations such as prefabrication, 3D printing, and green building materials are not only making construction quicker and more cost-efficient but are also aligning with the growing demand for sustainable and energy-efficient homes. These technological improvements are attracting both homeowners and real estate developers, eager to reduce costs and enhance the quality of construction. Consequently, technology is evolving into a critical enabler of the marketÂ’s expansion.

Regionally, Asia Pacific is expected to dominate the residential construction market during the forecast period. Rapid economic development, substantial urban migration, and supportive governmental policies are driving the market in this region. Countries like China and India, with their massive populations and expanding middle classes, present immense opportunities for residential construction. However, North America and Europe are also experiencing steady growth, driven by urban renewal projects and an increasing focus on sustainable living spaces. The Middle East & Africa and Latin America, while smaller in market share, are anticipated to witness moderate growth fueled by urbanization and infrastructural investments.

Construction Spending plays a pivotal role in shaping the dynamics of the residential construction market. The allocation of funds towards building new homes and renovating existing structures directly influences the pace and scale of market growth. Governments and private investors are increasingly recognizing the importance of strategic construction spending to address housing shortages and improve living conditions. By channeling resources into construction projects, stakeholders can stimulate economic activity, create jobs, and enhance infrastructure. This financial commitment not only supports the development of new residential units but also ensures the modernization and sustainability of existing housing stock, aligning with broader urban development goals.

Type Analysis

The residential construction market can be segmented by type into single-family housing and multi-family housing. Single-family housing remains a dominant segment, driven by the growing preference for privacy and individual living spaces. This trend is particularly prominent in North America and Europe, where suburban living is highly popular. Single-family homes offer the luxury of private outdoor spaces, better control over living conditions, and more room for customization, making them highly desirable among homeowners. The financial incentives provided by g

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US Residential Construction Market Size 2025-2029

The US residential construction market size is forecast to increase by USD 242.9 million at a CAGR of 4.5% between 2024 and 2029.

The Residential Construction Market in the US is experiencing significant growth driven by increasing household formation rates and a rising focus on sustainability in new projects. According to the latest data, household formation is projected to continue growing at a steady pace, fueling the demand for new residential units. This trend is particularly evident in urban areas, where population growth and limited space for new development are driving up demand. Meanwhile, the emphasis on sustainability in residential construction is transforming the market landscape. With consumers increasingly prioritizing energy efficiency and eco-friendly features in their homes, builders and developers are responding by incorporating green technologies and sustainable materials into their projects.
This shift not only appeals to environmentally-conscious consumers but also offers long-term cost savings and regulatory compliance benefits. However, the market is not without challenges. Skilled labor shortages continue to pose a significant hurdle for large-scale residential real estate projects. The ongoing shortage of skilled laborers, including carpenters, electricians, and plumbers, is driving up labor costs and delaying project timelines. To mitigate this challenge, some builders are exploring alternative solutions, such as modular construction and automation, to streamline their operations and reduce their reliance on traditional labor sources. The Residential Construction Market in the US presents significant opportunities for companies seeking to capitalize on the growing demand for new housing units and the shift towards sustainability.
However, navigating the challenges of labor shortages and rising costs will require innovative solutions and strategic planning. By staying informed of market trends and adapting to evolving consumer preferences, companies can effectively position themselves for success in this dynamic market.

What will be the size of the US Residential Construction Market during the forecast period?

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The residential construction market in the United States continues to exhibit dynamic activity, driven by various economic factors. Housing supply remains a key focus, with ongoing discussions surrounding the affordable housing trend and efforts to increase inventory, particularly for single-family homes and new constructions. Mortgage and federal funds rates have an impact on residential investment, with fluctuations influencing buyer decisions and construction costs. The labor market plays a crucial role, as workforce availability and wages affect both housing starts and cancellation rates. Inflation and interest rates, monitored closely by the Federal Reserve, also shape the market's direction. Recession risks and economic conditions influence construction spending across various sectors, including multifamily and single-family homes.
Federal programs, such as housing choice vouchers and fair housing initiatives, continue to support home buyers and promote equitable housing opportunities. Building permits and housing starts serve as essential indicators of market health and future growth, with some sectors experiencing double-digit growth. Overall, the residential construction market in the US remains a significant economic driver, shaped by a complex interplay of economic, demographic, and policy factors.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Product

  Apartments and condominiums
  Luxury Homes
  Other types


Type

  New construction
  Renovation


Application

  Single family
  Multi-family


Construction Material

  Wood-framed
  Concrete
  Steel
  Modular/Prefabricated


Geography

  US

By Product Insights

The apartments and condominiums segment is estimated to witness significant growth during the forecast period.

The residential construction market in the US is experiencing growth in both the apartment and condominium sectors, driven by the increasing trend toward urbanization and changing lifestyle preferences. Apartments, typically owned by property management companies, and condominiums, with individually owned units within a larger complex, contribute significantly to the market. The Federal Reserve's influence on the economy through the federal funds rate and mortgage rates impacts borrowing rates and home construction activity. The affordability of housing, particularly for younger generations, is a concern due to factors such as inflation, labor market conditions, and savings

Graph and download economic data for New Privately-Owned Housing Units Under Construction: Units in Buildings with 5 Units or More (UNDCON5MUSA) from Jan 1970 to May 2025 about 5-unit structures +, construction, new, private, housing, and USA.

Total Construction Spending: Residential in the United States was 904593.00000 Mil. of $ in April of 2025, according to the United States Federal Reserve. Historically, Total Construction Spending: Residential in the United States reached a record high of 990265.00000 in May of 2022 and a record low of 244399.00000 in May of 2009. Trading Economics provides the current actual value, an historical data chart and related indicators for Total Construction Spending: Residential in the United States - last updated from the United States Federal Reserve on July of 2025.

Latin America Residential Construction Market size was valued at USD 373.00 Billion in 2024 and is projected to reach USD 572.41 Billion by 2032, growing at a CAGR of 5.5% from 2026 to 2032. Latin America Residential Construction Market: Definition/OverviewResidential construction is the process of building or improving homes where people live, encompassing houses, apartments, and townhouses. It involves everything from initial design and land preparation to roofing and interior finishing, with the goal of creating safe and comfortable living spaces. Residential construction projects range from small renovations to constructing entire neighborhoods. The U.S. Department of Labor defines residential construction as projects involving the construction, alteration, or repair of single-family houses or apartment buildings typically no more than four stories in height. This type of construction differs from commercial construction because it focuses on creating living spaces rather than workspaces. Residential construction includes various sub-types such as single-family homes, multi-unit residential buildings (like condos and apartments), and custom-built homes.

The North American residential construction market, valued at $850 million in 2025, is projected to experience robust growth, driven by several key factors. A steadily increasing population, particularly in urban centers, fuels the demand for new housing units, both single-family homes and multi-family dwellings. Furthermore, favorable government policies aimed at stimulating housing development and improving infrastructure contribute to this positive market outlook. The renovation segment also presents a significant opportunity, as older homes require upgrades and modernizations, catering to a rising preference for energy efficiency and sustainable building practices. While rising material costs and labor shortages pose challenges, the market's resilience stems from consistent demand and the innovative solutions adopted by major players like Lennar, D.R. Horton, and PulteGroup. These companies are strategically investing in technological advancements and streamlined construction processes to mitigate these challenges and maintain profitability. The market is segmented by property type (single-family and multi-family) and construction type (new construction and renovation), allowing for targeted investment and development strategies. The continued expansion of suburban areas and the increasing preference for larger living spaces further contribute to the market's expansion. The projected Compound Annual Growth Rate (CAGR) of 4.5% from 2025 to 2033 indicates sustained growth. This growth, however, is expected to fluctuate year-over-year depending on macroeconomic conditions such as interest rates and overall economic performance. Factors like fluctuating material prices, potential changes in building codes, and shifts in consumer preferences will influence the market’s trajectory. Nevertheless, the long-term forecast remains optimistic, supported by the continued need for affordable and sustainable housing solutions across North America, particularly in high-growth regions within the United States and Canada. The competitive landscape is characterized by both large national builders and regional players, leading to constant innovation and competition in pricing and design. This comprehensive report provides a detailed analysis of the North America residential construction market, offering invaluable insights for investors, builders, and industry stakeholders. Covering the period from 2019 to 2033, with a focus on 2025, this report meticulously examines market trends, growth drivers, challenges, and opportunities within the single-family, multi-family, new construction, and renovation sectors. Utilizing data from the historical period (2019-2024), the base year (2025), and an estimated forecast period (2025-2033), this report paints a clear picture of the market's trajectory. Recent developments include: December 2022: In southeast Columbus, D.R. Horton intends to build homes for USD 215 million., December 2022: According to the company's fourth-quarter results call, Lennar Corp. has decided not to proceed with its plans to spin off its multifamily subsidiary, Quarterra, by the end of the year owing to adverse market circumstances., December 2022: At the southeast corner of Idlewild Street and Plantation Road in south Fort Myers, a 17-acre site is being cleared. According to Lee County documents, the area will be transformed into the 52-home neighborhood of Addison Square. The land was purchased by Pulte Homes for USD 2.4 million in a deal facilitated by Chuck Mayhugh of Mayhugh Commercial Advisors. The homes will vary in price from more than USD 500,000 and have 1,600 to 3,400 square feet of living space, with the majority of the homesites being grouped together along a sizable, central lake. According to Pulte executives, construction on the model houses should start by the spring, with some of them being done by the summer.. Key drivers for this market are: Population Growth and Disposable Income, Demand from Office Sector Returning Post COVID-; Non-residential Construction on Upward Trend. Potential restraints include: Interests and Financing, Increase in Cost of Raw Materials. Notable trends are: 800,000 Housing Units Must Be Built Annually in Mexico to Keep Up with Demand.

Residential building contractors are contingent on the propensity of property developers to invest in new ventures; movements in property prices; government schemes intended to boost the housing supply; and underlying sentiment in the housing market. Industry contractors have endured turbulent operating conditions over the past five years, leading to volatile shifts in revenue and profitability. Revenue is forecast to grow at a compound annual rate of 1% over the five years through 2024-25, reaching £97.4 billion. The pandemic caused a significant drop in output in 2020-21, as restrictions placed on on-site activity and fewer enquiries for new housing units reduced revenue opportunities. Aided by government support for the housing market and the release of pent-up demand, 2021-22 was characterised by a strong rebound in activity, though materials and labour shortages maintained constraints on output. Mounting supply chain disruption and heightened economic uncertainty maintained pressure on output in the following year, though revenue growth was maintained by growth in average selling prices. Interest rate hikes and inflationary pressures led to a more subdued housing market in 2022-23, holding back the number of housing starts and completions during the year. This was followed by a slump in new residential building construction in the following year, as high borrowing costs and uncertain market conditions caused developers to scale back investment plans. Revenue is set to grow by 1.5% in 2024-25, aided by a slight improvement in new orders for residential building construction and an uptick in average selling prices. Revenue is slated to climb at a compound annual rate of 1.5% to reach £105.1 billion over the five years through 2029-30. Housebuilding activity is set to grow in the medium-term, aided by the release of pent-up demand. Nonetheless, significant uncertainty remains, with mortgage rates likely to settle well-above pre-pandemic levels and supply chains remaining fragile. The new government’s pledge to deliver 1.5 million houses during the first five years of parliament will boost demand for industry contractors, though the full impact of this on growth prospects is dependent on the nature and extent of accompanying funding plans.

The Latin American residential construction market, currently valued at approximately $XX million (estimated based on available data and market trends), is projected to experience steady growth with a Compound Annual Growth Rate (CAGR) of 4.50% from 2025 to 2033. This expansion is driven by several key factors. Firstly, increasing urbanization across the region is fueling demand for new housing, particularly in major metropolitan areas like Sao Paulo, Mexico City, and Buenos Aires. Secondly, a growing middle class with increased disposable income is creating a larger pool of potential homebuyers. Furthermore, government initiatives promoting affordable housing and infrastructure development in several Latin American countries are contributing positively to market growth. The market is segmented by housing type, including villas/landed houses, condominiums/apartments, and prefabricated homes, each catering to different consumer preferences and income levels. While prefabricated homes are gaining traction due to cost-effectiveness and faster construction times, the traditional villa and apartment segments continue to dominate the market. Growth, however, faces challenges like economic instability in certain regions, fluctuating material costs, and regulatory hurdles in obtaining construction permits. Competition amongst major players such as Hogares Eden S A de C V, Constructora VDZ SpA, and others, drives innovation and efficiency within the sector. The forecast period from 2025 to 2033 anticipates continued market expansion, despite potential headwinds. The consistent CAGR of 4.50% suggests a significant increase in market value by 2033. However, the market’s trajectory will depend significantly on macroeconomic stability, consistent government support, and the successful mitigation of construction challenges. Further segmentation analysis considering factors like building material type and technological advancements in construction methods will provide a more granular understanding of this dynamic market. Specific regional variations are expected, with countries experiencing robust economic growth exhibiting faster market expansion compared to those facing economic challenges. Continuous monitoring of these factors will be critical for accurately projecting future market performance. Recent developments include: January 2023: Modularis is set to break ground in May of 2023 for new residential development in Sao Paulo, Brazil, made possible by modular construction and will be comprised of two concrete floors with commercial spaces and 11 floors of modular apartments and is set to be complete by the end of the 2023., September 2022: A new Las Colinas housing community planned to bring about six dozen high-end homes next to the headquarters building for Fluor Corp. The more than 22-acre single-family home neighborhood is estimated to have a value of USD 140 million and will be constructed at Las Colinas and La Villita boulevards in Irving.. Notable trends are: Social Rental Drive.

Homeownership provides financial and emotional security and often represents an individual or family's most significant investment. House Construction industry contractors build single-unit (detached) dwellings or renovate and repair existing houses. Australia's solid population growth underpins the industry's performance. Still, a long-term shift in housing preferences towards constructing high-density apartments and townhouses has eroded revenue. House construction surged to a record peak in 2021-22 despite the pandemic restrictions and supply chain blockages impeding progress on construction projects. Homebuyers responded to record-low mortgage interest rates, favourable bank lending practices and the stimulus from the Federal Government's HomeBuilder scheme by unprecedented investment in new single-unit house construction and home renovations. As the housing market heated up, builders faced challenges juggling heavy workloads while dealing with supply bottlenecks, skill shortages and rising costs. The industry's revenue performance has taken a hit in recent years as housing investment slumped following the hike in mortgage interest rates as the RBA lifted official cash rates to quell inflation. Meanwhile, the HomeBuilder scheme wound down with the completion of funded projects. Industry revenue is expected to fall by 2.9% in 2024-25 and decline at an annualised 1.5% over the five years through 2024-25 to $76.1 billion. The industry's profit margins have suffered, partly reflecting the supply chain disruptions during the housing boom stemming from the COVID-19 restrictions. These bottlenecks delayed construction projects and inflated input prices for building materials, fuel, capital equipment and skilled labour. Fixed-price contracts and escalating input costs have pushed many homebuilders to the brink. Mounting population pressure and some easing in mortgage interest rates will support the moderate recovery in the industry's performance. Homebuilders may also derive some support from a commitment to construct 1.0 million new homes under the National Housing Accord. Still, much of the focus of residential building construction will shift towards high-density apartment and townhouse developments rather than single-unit houses. Industry revenue is forecast to climb at an annualised 1.4% to $81.6 billion through the end of 2029-30.

Graph and download economic data for New Privately-Owned Housing Units Completed: Units in Buildings with 5 Units or More (COMPU5MUSA) from Jan 1968 to May 2025 about 5-unit structures +, new, private, housing, and USA.

France - Residential construction was 5.80 % of GDP in December of 2024, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for France - Residential construction - last updated from the EUROSTAT on July of 2025. Historically, France - Residential construction reached a record high of 7.20 % of GDP in December of 2021 and a record low of 5.20 % of GDP in December of 1996.

United States - All Employees, Residential Building was 962.80000 Thous. of Persons in May of 2025, according to the United States Federal Reserve. Historically, United States - All Employees, Residential Building reached a record high of 1022.00000 in April of 2006 and a record low of 542.60000 in April of 1992. Trading Economics provides the current actual value, an historical data chart and related indicators for United States - All Employees, Residential Building - last updated from the United States Federal Reserve on July of 2025.

Forecast: Number of High Growth Enterprises in Construction of Residential and Non-residential Buildings in Italy 2024 - 2028 Discover more data with ReportLinker!

Texas was the U.S. state with the highest value of new private sector non-residential construction put in place in 2023 at 89.7 billion U.S. dollars. Some of the other leading states in the list were Arizona, Florida, and California. In the U.S. as a whole, the type of amusement and recreation construction with the highest value put in place were sport-related projects.

In the first half of the past five-year period, the property development industry benefited greatly from the historically low interest rates in the European Economic Area between 2016 and 2022. In the second half of the past five-year period, however, market activity slowed significantly. This development was caused by a sharp rise in construction costs on the one hand and the tightening of monetary policy initiated by the European Central Bank from mid-2022 onwards, which significantly worsened financing conditions for property developers and potential property buyers on the other. The high inflation rates in 2022 and 2023 and the associated loss of purchasing power also had a dampening effect on demand for property. Under these circumstances, large and small property developers scaled back their new-build projects or postponed their realisation. Against this backdrop, turnover in the property development sector fell by an average of 7.3% per year between 2020 and 2025.In 2025, industry turnover is expected to grow by 0.9% compared to the previous year and reach 23.9 billion euros. This development is due to the weak recovery trends that the domestic property market has been showing since 2024.Over the next five years, IBISWorld expects average annual sector growth of 2.7% and a sector turnover of 27.3 billion euros by 2030. Around three quarters of the sector's turnover will be generated with residential property. Due to the continuing high demand for residential space and the increasing scarcity of suitable building land, even in the less dynamic market environment of the coming five-year period, more multi-storey flats are likely to be built, often using the services of a property developer.

Japan Residential Construction Market size was valued at USD 262 Billion in 2024 and is projected to reach USD 401 Billion by 2032, growing at a CAGR of 5.4% from 2026 to 2032. The Japan residential construction market is driven by government incentives for sustainable and energy-efficient housing, including subsidies and tax breaks for eco-friendly buildings. An aging housing stock also creates demand for redevelopment and renovation projects. Urbanization and limited land availability push demand for compact, high-tech housing solutions in cities. Additionally, low interest rates and strong public infrastructure support continue to attract investment in residential construction.