Single-Family Construction Continues Dramatic Climb

Filed in Economics by on October 20, 2020 3 Comments

frame of new house under constructionSingle-family starts showed continued growth in September as overall housing production increased 1.9 percent to a seasonally adjusted annual rate of 1.42 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The September reading of 1.42 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 8.5 percent to a 1.11 million seasonally adjusted annual rate. This is the highest pace of single-family starts since June 2007. The multifamily sector, which includes apartment buildings and condos, decreased 16.3 percent to a 307,000 pace.

“The housing market remains a bright spot in the U.S. economy, and this is reflected in today’s positive housing starts report,” said NAHB Chairman Chuck Fowke. “Builder confidence is at an all-time high as buyer traffic is strong—another sign that housing is helping to lift the economy.”

“Home sales have exceeded for-sale home construction recently, which means additional home building in the near term,” said NAHB Chief Economist Robert Dietz. “Demand is being supported by low interest rates, a suburban shift in demand and demographic tailwinds. However, headwinds due to limited building material availability is slowing some construction activity despite strong demand, with authorized but not started single-family homes up 22.4 percent compared to a year ago.”

On a regional and year-to-date basis (January through September of 2020 compared to that same time frame a year ago), combined single-family and multifamily starts are 11.0 percent higher in the Midwest, 5.7 percent higher in the South, 4.5 percent higher in the West and 1.4 percent lower in the Northeast.

Overall permits increased 5.2 percent to a 1.55 million unit annualized rate in September. Single-family permits increased 7.8 percent to a 1.12 million unit rate. Multifamily permits decreased 0.9 percent to a 434,000 pace.

Looking at regional permit data on a year-to-date basis, permits are 4.5 percent higher in the Midwest, 6.4 percent higher in the South, 0.5 percent higher in the West and 4.1 percent lower in the Northeast.

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