Single-family and multifamily housing production accelerated in November, due to strong demand for new construction. Overall housing starts increased 11.8 percent to a seasonally adjusted annual rate of 1.68 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
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 percent to a 1.17 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 12.9 percent 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 percent year-to-date as demand for new construction remains strong due to a lean inventory of resale housing,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Florida. “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 percent 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 percent year-over-year rise in construction material costs and longer construction times.”
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 percent higher in the Northeast, 9.6 percent higher in the Midwest, 15.4 percent higher in the South and 19.4 percent higher in the West.
Overall permits increased 3.6 percent to a 1.71 million unit annualized rate in November. Single-family permits increased 2.7 percent to a 1.10 million unit rate. Multifamily permits increased 5.2 percent to an annualized 609,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 13.6 percent higher in the Northeast, 16.3 percent higher in the Midwest, 19.3 percent higher in the South and 22.4 percent higher in the West.