Single-family starts edge higher in December

Home News Single-family starts edge higher in December

multifamily production
While single-family housing is showing a double-digit percentage gain, NAHB reports multi-family production is decreasing.

Washington D.C.—According to the National Association of Home Builders (NAHB), single-family housing starts posted a double-digit percentage gain in December, but production is running well below a rate of 1 million units annually, indicating ongoing weakness in the housing market as high construction costs and elevated interest rates continue to present affordability challenges.

Led by a decline in multi-family production, overall housing starts decreased 1.4% to a seasonally adjusted annual rate of 1.38 million units in December, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

According to the NAHB, the December reading of 1.38 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 909,000 seasonally adjusted annual rate, but are down 25% compared to December 2021. The multi-family sector, which includes apartment buildings and condos, decreased 19% to a 473,000 pace.

Total housing starts for 2022 were 1.55 million, a 3% decline from the 1.60 million total from 2021. Single-family starts in 2022 totaled 1.01 million, down 10.6% from the previous year. Multi-family starts (5+) in 2022 were up 14.5% compared to the previous year and exceeded a 500,000 annual pace for the first time since the Great Recession.

“Even though single-family starts are up on a monthly basis, permits indicate that the housing market will slow down further in 2023,” said Jerry Konter, chairman of the NAHB and a home builder and developer from Savannah, Ga. “We expect a sustainable decline for mortgage rates in the second half of this year, which should lead to a housing recovery in 2024.”

According to Danushka Nanayakkara-Skillington, assistant vice president for forecasting and analysis, NAHB, the decline in single-family permits indicates that builders are slowing construction activity as interest rates have spiked in recent months. “Starts began on a strong footing in early 2022 but fell back in the latter part of the year as higher costs led to a pause in home building activity and affordability conditions worsened for home buyers,” he said.

On a regional and year-to-year basis, combined single-family and multi-family starts are 5% higher in the Northeast, 5.7% lower in the Midwest, 1.6% lower in the South and 7.2% lower in the West.

Overall permits decreased 1.6% to a 1.33 million unit annualized rate in December and are down 29.9% compared to December 2021. Single-family permits decreased 6.5% to a 730,000 unit rate and are down 34.7% compared to December 2021. Multi-family permits increased 5.3% to a 600,000 pace.

Looking at regional permit data on a year-to-year basis, permits are 13.6% lower in the Northeast, 3.4% lower in the Midwest, 2.4% lower in the South and 8.3% lower in the West.

Must Read

Issues that keep executives awake at night

There is no shortage of matters of concern to flooring professionals these days. These range from issues outside their control, i.e., inflation, interest rate...

Mining for talent in a pandemic-stricken market

Hiring is not an easy task. Does the candidate have the qualities needed to succeed in the role? Do your goals align? Are they...

New to the game: First-time flooring store owners

Whether it’s starting over or starting from scratch, opening your own flooring store takes time, dedication and the ability to think on your feet. Even...

Samplesapp – Live from TISE The International Surface Event 2023 – Floor Covering News

Floor Covering News asks Carole Cross of Samplesapp "What are you excited to share at Surfaces 2023?" Tune in as Carole walks us through...

Unilin, Zeetree, Barberan reach new agreement

Waregem, Belgium—Unilin Technologies, Barberan and Zeetree said they reached an agreement with different parties to open up its broad patent portfolio for direct to...

Michael Halebian & Co. wins Smooth Performer award

Las Vegas—Schönox presented Michael Halebian & Co. with the 2022 Smooth Performer Award in recognition of the companys' high level of support, dedication and...
Some text some message..
X