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The new construction housing market appears to be stagnant this season.
Building permit activity in the Seattle area has been declining in recent years, especially compared with previous cycles. Several independent data sources and local analyses show a notable slowdown.
The thig is, building permits are a pre-cursor to new home construction. So, if permits are down, so is the emergence of new housing.
Overall permit issuance is down: Data from the January 2026 Builders Bulletin shows single-family permits in King, Snohomish, and Pierce counties were about 8 % lower through October 2025 compared with the same period the year before, while multifamily permits declined about 17%.
Earlier data from last year also showed substantial first-quarter drops, with multifamily permits down ~46% and single-family permit figures weaker as well in the spring.
Independent analyses report permit application volumes shrinking — such as a roughly 47% year-over-year drop in residential units under application on the city’s permit dashboard — indicating fewer projects entering the pipeline.
Several factors appear to be contributing to the slowdown:
Financing pressures: Higher interest rates and increasing construction costs make projects less feasible and reduce demand for new permits.
Policy and process: Local policy and regulatory complexity have been cited by developers as barriers, slowing permit volume and discouraging new projects.
Shift in project types: There’s a trend toward smaller and mid-sized projects rather than large developments, which still requires staff time but generates fewer total permits.
Right now, the housing market is short millions homes, according to Freddie Mac. The housing shortage has been a long-standing issue, and appears to be worsening with each passing year. Simply put, supply has not been able to keep up with demand. Homebuilders are coming up short every year in terms of feeding demand.
If you’re planning to buy new construction in Washington or Oregon this year, be sure to ask your real estate agent about the local home supply, and how the market is currently trending. With Seattle mortgage rates low and the summer buying season approaching, you may find some of your best deals of the year available in just the next few weeks.
Pro Tip: Visit our website to use our online mortgage calculator to estimate your loan costs.
Are you looking to apply for a mortgage in Seattle, WA or anywhere else in the Pacific Northwest? Sammamish Mortgage can help. We are a local, family-owned company based in Bellevue, WA. We serve all of Washington, Idaho, Colorado, Oregon, and California. We offer a wide variety of mortgage programs and products with flexible qualification criteria, including our 15-year fixed-rate mortgages, 30-year fixed-rate mortgages, and adjustable-rate mortgages (ARMs), among others. Please contact us if you have mortgage-related questions, or to get an instant rate quote, or to get pre-approved for a mortgage.
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