Japan’s housing sector showed signs of a mild stabilization at the start of 2026, as the year-over-year decline in housing starts narrowed in January. According to the latest data updated on 27 February 2026, housing starts fell 0.4% in January 2026 compared with the same month a year earlier, improving from a 1.3% year-over-year drop in December 2025.
The data, measured on a year-over-year basis, indicate that while construction activity remains in negative territory, the pace of contraction has slowed. In December 2025, the indicator showed a 1.3% decline versus December 2024, whereas January’s reading reflects a smaller 0.4% fall compared with January 2025.
The softer decline may suggest that pressures on Japan’s residential construction are easing somewhat, but the sector has yet to return to outright growth. Market participants will be watching upcoming months’ data closely to see whether this moderation continues and potentially signals a more durable recovery in Japan’s housing activity.
