Single-Family Starts Leveling Off
2020 was a strange year. While the economic impact of the coronavirus was devastating for many businesses, it was a boon to others. The housing industry saw not only an increase in demand, but a shift if what consumers wanted. Housing affordability continues to be a problem that needs addressing, but demand is high and labor and material needs are struggling to keep up.
With that in mind, single family construction remained strong, though leveled off in November. Continue reading for the complete article from the National Association of Home Builders.
Single-Family Starts Leveling Off at Strong Pace in November
Single-family starts flattened in November as builders struggled to meet demand, while overall housing starts increased 1.2 percent to a seasonally adjusted annual rate of 1.55 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 1.55 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 0.4 percent to a 1.19 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 4.0 percent to a 361,000 pace.
“Though single-family construction continued to be strong in November, builders are unable to keep up with demand due to rising regulatory and construction costs and shortages of lots and labor,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla. “The incoming Biden administration needs to focus on policies to improve housing affordability and to increase supply to help housing continue to lead the economy forward.”
“The single-family construction sector appears to be leveling off at strong levels, with permits roughly at a flat level from September to October,” said NAHB Chief Economist Robert Dietz. “Nonetheless, the growth for single-family construction was a true bright spot amid economic challenges in 2020, with single-family starts up 10 percent year-to-date and posting the best year since the Great Recession. However, the backlog continues to grow, with the number of single-family homes permitted but not started construction up 16.3 percent from November 2019 to November 2020 as material delays and higher costs hold back building.”
On a regional and year-to-date basis (January through November of 2020 compared to that same time frame a year ago), combined single-family and multifamily starts are 14.4 percent higher in the Midwest, 7.6 percent higher in the South, 5.4 percent higher in the West and 3.3 percent lower in the Northeast.
Overall permits increased 6.2 percent to a 1.64 million unit annualized rate in November. Single-family permits increased 1.3 percent to a 1.14 million unit rate. Multifamily permits increased 19.2 percent to a 496,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 5.7 percent higher in the Midwest, 6.9 percent higher in the South, 0.7 percent higher in the West and 4.4 percent lower in the Northeast.