US Housing Construction Rebounds
U.S. housing construction rebounded in February, with both permits and starts trending up despite high interest rates. Meanwhile, momentum is building in Congress for a bipartisan package to tackle housing affordability by increasing supply and easing zoning laws.
The surprisingly strong January 2026 housing data saw construction starts jump to an annualized rate of 1.48 million units, significantly beating economist expectations. Building permits, a key indicator of future construction, also climbed to their highest level since early 2024, suggesting builders are optimistic about the upcoming spring market. This construction uptick arrives as 30-year fixed mortgage rates have stabilized, hovering around 6% in late February 2026 after trending down from recent highs. Projections from Fannie Mae suggest rates may remain near this 6% level for most of the year, potentially offering a more predictable financing environment for buyers and builders. In Congress, the "Housing for the 21st Century Act" recently passed the House with overwhelming bipartisan support, 390-9. The bill aims to increase housing supply by streamlining federal review processes for some residential projects and directing HUD to develop model policies for local governments to ease zoning restrictions. The legislation must now be reconciled with a separate Senate housing package, the "ROAD to Housing Act." While both bills share a focus on boosting supply, they have differences in spending and programmatic details that lawmakers will need to negotiate before a final version can be sent to the President. Locally in Fort Washington, MD, the housing market is more balanced. The median home sale price in January 2026 was approximately $522,000, a decrease of 6.3% compared to the previous year. Homes are also staying on the market longer, averaging 85 days compared to 39 days a year ago, reflecting a less frenzied pace for buyers. This national push for housing supply comes as economists forecast a "rebalancing" of the market in 2026 rather than a major crash. National home price growth is expected to cool to around 2-3%, potentially allowing wage growth to outpace housing inflation and improve affordability.
