A Snapshot of Housing is a Snapshot of Small Business

By SBE Council at 22 May, 2026, 12:59 pm

by Raymond J. Keating -

Housing has always fascinated me as an economist. It's actually a consumption product that also serves as the major investment for many American families. And housing construction and investment play a significant role in our economy. In turn, housing construction is overwhelming about small businesses.

Based on the latest (2022) data from the U.S. Census Bureau, 92.1 percent of employer firms in the residential building construction sector have fewer than 10 employees; 97.2 percent have fewer than 20 workers; and 99.7 percent have fewer than 100 employees.

So, when the latest housing data are reported, the numbers and trends are worth considering for multiple reasons. (The following chart offers a look at housing starts in the twenty-first century.)

Source: Federal Reserve Bank of St. Louis, FRED

First, the National Association of Home Builders has reported that "builder confidence in the market for newly built single-family homes increased three points to 37 in May." When the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) comes in over 50, that indicates that more builders view conditions as good than poor, and vice versa.

NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio, said, "The housing market remains soft as higher mortgage rates, rising gas prices and economic uncertainty related to the war in Iran continue to dampen buyer demand."

Second, in terms of the latest data from the U.S. Census Bureau, housing starts in April came in at an annual rate of 1,465,000. That was 2.8 percent below March's 1,507,000. However, it was up by 4.6 percent compared to a year earlier (April 2025 rate of 1,400,000).

Single-family housing starts registered 930,000 in April, which was down from a spike up to 1.02 million in March, but higher that February's 923,000 and January's 894,000. And compared to a year earlier, single-family starts were down by 2.4 percent.

As for housing building permits (an indicator of future starts) in April, they came in at a seasonally adjusted annual rate of 1,442,000. That was up 5.8 percent compared to the revised March rate of 1,363,000, but down by 0.2 percent versus the April 2025 rate of 1,445,000.

Housing is affected deeply by policy issues from the local town up through Congress and federal agencies. And in the end, when policymakers talk about housing affordability, it shouldn't be about government housing or subsidies, but instead establishing the best possible policy climate for housing entrepreneurs, businesses and investors to develop and build more housing - from reducing costs and barriers related to zoning laws and other regulations, to local, state and federal tax policies, to matters like inflation and tariffs, and more.

Thankfully, the housing affordability bill that passed the U.S. House, followed by U.S. House passage of an amended Senate version this week, includes important deregulatory and streamlining provisions (along with solid community banking measures to create more financing choices for consumers) that support the industry in its work to build more housing options.

Less government intrusion will let the housing industry build the type of housing the market needs, from rentals to entry-level homes to luxury housing. In the end, the only way to assure more affordable housing is to build more housing.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of " The Weekly Economist " book series, and 10 Points from Walt Disney on Entrepreneurship .