Washington, DC — The number of single-family homes continued to fall in November, with a construction rate of 32% since February, when mortgage rates began to rise, according to the National Association of Home Builders (NAHB). The housing market continues to weaken because stubbornly high construction costs, high interest rates and declining demand are hurting housing affordability. And with the number of multi-family homes under construction hitting a nearly 50-year high, multi-family permit growth is slowing.
Total housing starts fell 0.5% in November to a seasonally adjusted annual rate of 1.43 million units, according to a report by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The November reading of 1.43 million starts is the number of housing unit builders that would start if development continued at this rate over the next 12 months. Within this total number, single-family start-ups fell 4.1% to 828,000 seasonally adjusted annual numbers. Year-to-date, the number of first-time buyers of single-family homes has fallen by 9.4%. The multi-family sector, which includes apartment buildings and condominiums, rose 4.9% to an annualized rate of 599,000.
“It comes as no surprise that single-family home starts are at their lowest levels since May 2020, as builder sentiment has fallen for 12 straight months as builders remain fixated on rising construction material costs and supply chain bottlenecks, particularly with electrical transformers in short supply.” says Jerry Konter, president of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Georgia.
“A key feature of the single-family housing market is that more single-family homes have been built in the past four months than started,” said Robert Dietz, NAHB chief economist. “The most recent data for November shows 25,500 more single-family homes completed than started, reducing the number of new homes under construction.”
On a regional and year-to-date basis, combined single-family and multi-family starts are 1.3% higher in the Northeast, 0.8% higher in the Midwest, 0.6% higher in the South, and 7.0% lower in the West .
The total number of licenses fell 11.2% in November to 1.34 million units year-over-year. Permits for single-family homes fell by 7.1% to 781,000 units. Multi-family permits fell 16.4% to a year-on-year pace of 561,000, the lowest level for apartment permits since September 2021.
Looking at year-over-year regional permit data, permits are 5.6% lower in the Northeast, 0.5% lower in the Midwest, 0.6% lower in the South, and 6.5% lower in the West.
The number of multi-family homes under construction for November is 932,000; this is the highest number since December 1973. The number of single-family homes under construction fell for six consecutive months to 777,000 homes in November.
Comments are closed.