Single-Family and Multifamily Ends 2021 With Strong Demand for New Construction
The U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported that both single-family and multifamily production increased 11.8% to an annual rate of 1.68 million units. The strong production stems from the high demand for new construction in the housing industry.
This means that 1.68 million homes will be started in the development stage if this pace kept up for the next year. Separated out, single-family increased to 11.3% to 1.17 million seasonally adjusted annual rate and multifamily increased 12.9% at a 506,000 seasonally adjusted annual rate.
Compared to the same time frame of 2020, on a regional and year-to-date basis (January through November of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 24.4% higher in the Northeast, 9.6% higher in the Midwest, 15.4% higher in the South and 19.4% higher in the West.
As far as permits, they increased 3.6% to 1.17 million. Single-family permits rose 2.7% to 1.10 million and multifamily increased 5.2% to 609,000 annual paces.
“Mirroring gains in the HMI reading of builder sentiment, single-family housing starts accelerated near the end of 2021 and are up 15.2% year-to-date as demand for new construction remains strong due to a lean inventory of resale housing,” said NAHB Chairman Chuck Fowke. “Policymakers need to help alleviate ongoing building material supply chain bottlenecks that are preventing builders from keeping up with buyer demand.”
“Breaking an eight-year trend, in recent months there have been more single-family homes under construction than multifamily units,” said NAHB Chief Economist Robert Dietz. “Moreover, despite some cooling earlier this year, the continued strength of single-family construction in 2021 means there are now 28% more single-family homes under construction than a year ago. These gains mean single-family completions will increase in 2022, bringing more inventory to market despite a 19% year-over-year rise in construction material costs and longer construction times.”