2025 delivered a clear tilt in housing construction toward MDUs, even as the broader homebuilding sector faced multiple headwinds. Overall new-home starts slipped, while MDUs rose about 10 percent, reaching an estimated 536,000 units for the year between 2024 and 2025.
In contrast, single-family housing declined, with output backing away from a high-water mark of around 1 million in 2024 to roughly 876,000 in 2025, a drop of more than 13%. This shift pushed MDUs to account for a substantial portion of all new units built in 2025—well over a third, and well above long-run norms.
Industry observers note that MDUs, containing five or more dwelling units, have become the most cost-effective footprints for broadband providers to serve. In 2025, the vast majority of MDU projects—an estimated 95% to 97%—were developed as rental apartment buildings, rather than owner-occupied housing.
Regional patterns varied. The South rebounded from recent losses, the Northeast posted modest gains, the West showed a partial recovery from a 2023 dip, and the Midwest endured notable declines. The divergence between a shrinking single-family market and a growing MDU market created an unusual dynamic in the overall housing landscape.
Building permits reinforce the MDU trend. In 2025, the first ten months generated permit activity representing about 82% of the total for all of 2024, with MDUs at roughly 86% of 2024’s pace. Historically, about 80% of permitted housing is eventually built, suggesting MDUs may keep pace through 2025’s end unless a deeper downturn arrives in 2026.
From a deployment perspective, MDUs offer a cost advantage for fiber and fixed wireless broadband. Passing an apartment door with fiber often costs under $1,500, and less when the building is near existing fiber lines or within good wireless range. Those economics help connect rental properties quickly, even if tenancy reaches full occupancy gradually.
Looking ahead, BEAD-driven broadband construction has not yet siphoned significant resources into MDUs, and overall construction remains sensitive to material costs, tariffs, and immigration-related labor availability. Nevertheless, the rental-dominant MDU pipeline is shaping market strategies for builders and deployers alike, as they navigate a population and housing mix that continues to tilt toward rental, multi-unit living.
Steve S. Ross, editor-at-large of Broadband Communities, notes that the evolving permit data and regional trends suggest MDUs could remain a resilient backbone for broadband deployment, even if the broader single-family market remains soft into late 2025 and beyond.
