In the United States, the construction of single-family homes saw a significant increase in February, but challenges such as escalating construction costs due to tariffs and labor shortages pose a threat to the recovery.

According to the Commerce Department's Census Bureau, single-family housing starts rose by 11.4% to reach a seasonally adjusted annual rate of 1.108 million units in the previous month. January's data was revised to show a decline in homebuilding to a rate of 995,000 units.

President Donald Trump's implementation and subsequent suspension of a 25% tariff on goods from Canada and Mexico, along with increased tariffs on Chinese products and steel and aluminum, have impacted the construction industry. A recent survey revealed that the National Association of Home Builders/Wells Fargo Housing Market Index dropped to a seven-month low in March, with builders citing elevated building material costs due to tariffs and other challenges like labor and lot shortages.

Reports suggest that some construction workers are avoiding job sites out of fear of deportation amid the administration's strict stance on illegal immigration. Undocumented immigrants make up about 23% of the construction workforce, as estimated by the Center for American Progress.

Despite a decrease in the average rate for a 30-year fixed-rate mortgage from 7%, concerns stemming from tariffs and the administration's efforts to reduce government size are affecting potential home buyers. The dwindling housing inventory levels, last witnessed in December 2007, may discourage builders from initiating new single-family housing projects.

Permits for future single-family housing construction dropped by 0.2% to reach a rate of 992,000 units in February.