Wednesday, April 22, 2026 from Floor Covering Weekly

Single-family starts slow as multifamily rebounds
By Sharyn Bernard

Signs of momentum are emerging in the builder and multifamily markets, but the broader outlook remains uneven as headwinds continue to weigh on performance. Newly released government data show total housing starts edged down to 1.36 million in 2025, with a sharp drop in single-family construction offset by a surge in multifamily activity — underscoring the sector’s uneven trajectory.

Delayed government economic data are now providing a clearer picture of housing activity in 2025, according to the National Association of Home Builders (NAHB). Total housing starts reached 1.36 million, down 1 percent from 1.37 million in 2024. Single-family starts totaled 943,000, a 7.2 percent decline from the previous year, while multifamily starts increased 16.9 percent compared to 2024.

At the same time, builder sentiment remains subdued. The NAHB/Wells Fargo Housing Market Index (HMI) inched up to 38 in March — still well below the break-even threshold — as affordability challenges, including elevated price-to-income ratios and high land and construction costs, continue to pressure demand.

The environment has created opportunities for concessions. “Builders are increasingly leaning on incentives to close deals, with 37 percent cutting prices and nearly two-thirds offering sales incentives, extending a yearlong trend,” noted Danushka Nanayakkara-Skillington, associate vice president, forecasting and analysis for NAHB.

“The single-family market has been weak,” said Kermit Baker, chief economist for The American Institute for Architects. “And it looks like it just got weaker in the last couple of weeks,” noting that affordability and persistently higher mortgage rates are a drag on the business. “It’s ironic though — there is a two to four million shortage of homes but still building below in terms of new homes. It’s digging an even deeper hole in terms o how much housing.”

His take on multifamily is equally negative. “There was a sense since the single-family market is so week, it had to boost the multifamily market. That turns out not to be the case,” also due to affordability. He explained that rents have gone up about 30 percent since the pandemic while income has risen less than 10 percent. “We have a record number of rent-burdened households.”

Commercial flooring groups report a weak market but see some opportunities. “Despite optimism heading into 2025, the multifamily market remains stuck” said Steve Kuhel, director of multifamily solutions for FEI Group.

For builders, “2025 was a year of uncertainty and adaptability,” said Wes Weger, director of home solutions for FEI Group. “Builders, suppliers and flooring dealers all needed to be a bit of a chameleon. Volume wasn’t what we saw in the ultra-low-interest rate years, but builders who managed cycle times and incentives well were profitable. The market rewarded disciplined operators.”

Geoff Gordon, executive director of Fuse Alliance, said that while the market is slower for new construction starts, “work will pick up as the year goes on.” And while some markets like Austin, Dallas, Phoenix and Nashville are overs-supplied, “the new construction opportunities are in the Midwest, Northeast and other supply constrained cities.”

Starnet is seeing growth in some areas, noted Mark Bischoff, CEO. “We saw a steady growth in the multifamily segment. While corporate workplace remains the largest share of business across the network, other segments like healthcare and education/K-12 continue to see momentum. Looking ahead, there is a notable shift taking place. With vacancy rates, outside of the trophy properties, above 20 percent in key markets we are seeing portions of corporate real estate being repositioned into multifamily. Contrary to prior cycles, workplace and multifamily are not overbuilt, so this adjustment can be made in an orderly way based on quality not quantity.”

Focus on Flooring

Flooring suppliers have seen the down market, too, citing the key macro trends. “The multifamily channel remains soft, particularly in capex and full rip-and-replace projects,” said Matthew Walker, vice president of multifamily for Shaw Floors. “High renewal rates are keeping renters in place longer, while affordability challenges continue to slow the transition from renting to homeownership.”

Meanwhile, “the single-family market is still subdued with 2026 housing starts tracking below this time last year,” said Scott Baker, vice president of single family for Shaw. “Many builders are focused on selling existing and aged inventory and have pulled back on starts. The primary challenge in the market remains affordability, driven by items such as elevated interest rates, inflation, and decreased buyer confidence.

“The builder and multifamily markets remain challenged,” said Trey Thames, vice president of residential sales for Engineered Floors (EF). “Single-family demand continues to be constrained by affordability, while lower mobility is impacting multifamily turns.”

The pressure will continue through the year. “The residential builder market, including both single-family and multifamily, continues to face headwinds as it moves through 2026,” said Chris King, senior vice president-sales, residential, for AHF Products. He noted for single-family building, “demand has been uneven due to affordability constraints, elevated mortgage rates and tighter household budgets.” And while multifamily has moderated from previous growth years, it is more stable. “Multifamily continues to be a relative bright spot, particularly for flooring, as projects still move forward and require durable, cost-effective solutions.”

Bryan Ellison, vice president of CALI builder team, said if interest rates improve, the market will follow. “We feel the state of the builder and multifamily market will be flat to up slightly in 2026. I rates continue to come down this summer and fall, it should really boost starts.”

Opportunity Knocks

Even in a soft market, there are opportunities. For example, “the outlook for remodeling remains solid,” said NAHB’s Nanayakkara-Skillington, noting the NAHB Remodeling Market Index registered a reading of 62 in the first quarter of 2026, suggesting continued growth for the home improvement sector in 2026. “Ongoing positive remodeler sentiment is consistent with NAHB’s outlook, given an aging housing stock and the lock-in effect of elevated mortgage rates keeping owners in the homes longer.”

Shaw’s Walker said the premise of supply and demand will help the multifamily business. “The opportunities are the same; the U.S. is underbuilt in housing, housing needs floors. Shaw sees the multifamily channel as fundamental and core to what we do.”

Baker agreed. “The long-term outlook for the single-family market remains strong. The opportunity now is to partner with our customers to deliver solutions that improve speed, conversion and service.”

The key, said EF’s Thames, is to solve problems. “Our biggest opportunity is to continue delivering innovative products that solve the challenges our customers face,” such as its PureColor fiber, which eliminates dye lots, reduces waste and increases profitability.

King of AHF said the company is seeing growth opportunities due to the company’s focus on domestic manufacturing. “The vast majority of our products are made in the USA, so it limits the risk of uncertainty and creates a stable supply chain. Domestic manufacturing is a major advantage.”

“Across both residential segments, builders are managing labor shortages, material cost volatility and financing pressures. As a result, the market outlook points to modest growth with a focus on efficiency and risk management rather than rapid expansion.” – Chris King, AHF Products

“We are helping our customers grow by delivering design, quality, service and value across a range of price points that meet their evolving needs.” – Trey Thames, Engineered Floors

“The long-term outlook for the single-family market remains strong. The opportunity now is to partner with our customers to deliver solutions that improve speed, conversion, and service.” – Scott Baker, Shaw

“We continue to hear that quality products that are competitively prices will win opportunities in this market. The CALI team has been strategic about positioning ourselves as dealer partners equipped to support the dealer-builder relationship.” – Bryan Ellison, CALI

“Regardless of trends up or down, housing is a fundamental need, and good housing with great finishes is always in demand.” – Matthew Walker, Shaw