After seeing a slight dip in the production of single-family and multifamily housing in October, the production of new homes accelerated in November due to strong demand for new construction. According to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts increased 11.8% to a seasonally adjusted annual rate of 1.68 million units.
The November reading of 1.68 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 11.3% to a 1.17 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 12.9% to an annualized 506,000 pace.
“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,” says Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla. “Policymakers need to help alleviate ongoing building material supply chain bottlenecks that are preventing builders from keeping up with buyer demand.”
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.
Overall permits increased 3.6% to a 1.71 million unit annualized rate in November. Single-family permits increased 2.7% to a 1.10 million unit rate. Multifamily permits increased 5.2% to an annualized 609,000 pace. Looking at regional permit data on a year-to-date basis, permits are 13.6% higher in the Northeast, 16.3% higher in the Midwest, 19.3% higher in the South and 22.4% higher in the West.
“Breaking an eight-year trend, in recent months there have been more single-family homes under construction than multifamily units,” says Robert Dietz, chief economist, NAHB. “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.”
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