Single-Family Starts Slip While Multifamily Bounces Back
- Total housing starts fell 0.7% to a 1.52 million unit pace during October. Residential construction continues to run at a strong pace, although procuring materials and labor continues to weigh on starts.
- Single-family starts dipped 3.9% during the month, the fourth straight decline. Demand is clearly not the problem. Yesterday’s NAHB/Wells Fargo Housing Market Index (HMI) reported strong buyer demand, helping drive builder confidence up three points in November to 83.
- Multifamily starts jumped up 7.1%, partially reversing the prior month’s decline. Apartment developers are moving forward with projects amid a widespread resurgence in demand as COVID concerns lessen, urban amenities reopen and the return to the office progresses.
- Residential construction continues to be plagued by input shortages and project delays. The number of housing starts currently under construction rose to 1.451 million-units in October. There are now more multifamily units under construction than at any time over the past 47 years, which provides some perspective on how much supply shortages are impacting construction.
- The total number of units that have been authorized but have not yet been started also rose to a series high of 265,000.
- Builders continue to push forward despite the headwinds brought on by intensifying labor and building material shortages. Total building permits increased 4.0% during October, with single-family and multifamily advancing 2.7% and 6.6%, respectively. Permitting activity is running at a strong pace that is roughly on par with 2020 and slightly faster than the rate seen before the pandemic in 2019.
- The Midwest, which posted a 5.6% gain, was the only region to see an improvement in overall starts. Starts declined 1.0% in the South and 3.3% in the West. The Northeast also registered a 0.8% decline.