Single-family starts post double-digit gain
Washington DC – Although single-family home starts declined in December due to ongoing supply-side challenges, they still managed to hit double digits in 2021, according to the National Association of Home Builders (NAHB). Total home purchases rose 1.4% in December to a seasonally adjusted annual rate of 1.70 million units, according to a report by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The December reading of 1.70 million starts is the number of home builders who would start if development continued at this pace over the next 12 months. Within this total number, the number of single-family homes fell 2.3% to 1.17 million seasonally adjusted annual figures. The multi-family sector, which includes condominiums and condominiums, grew 10.6% to a pace of 530,000.
The total number of homes started for 2021 was 1.60 million, a gain of 15.6% compared to the total of 1.38 million as of 2020. Single-family homes started in 2021 totaling 1.12 million, an increase of 13.4 % compared to the previous year. Multi-family start-ups in 2021 (5+) increased by 22.1% compared to the previous year.
“The price and availability of building materials, and the supply chain in general, remains the most pressing, immediate challenge for builders seeking to add to the housing supply,” said Chuck Fowke, president of NAHB. “Policymakers need to focus on alleviating production bottlenecks and eliminating tariffs on Canadian timber to address the issues builders currently face.”
According to NAHB chief economist Robert Dietz, the 2021 double-digit gains for single-family startups were a continuation of housing construction that took place in the wake of the pandemic. “But with mortgage rates rising and building costs rising, affordability headwinds are mounting,” Dietz said. “NAHB’s 2022 outlook calls for relatively flat conditions for single-family construction, with added benefits for multi-family housing and remodeling.”
On a regional and year-to-date basis (January to December 2021 compared to the same period a year ago), combined single-family and multi-family starts are 22.2% higher in the Northeast, 10.9% higher in the Midwest, 15, 3% higher in the south and 16.9% higher in the west.
Total licenses rose 9.1% in December to 1.87 million units year on year. Single family licenses increased 2.0% to a unit rate of 1.13 million. Multi-family permits increased by 21.9% to 745,000.
Looking at year-over-year regional permit data, permits are 22.4% higher in the Northeast, 14.4% higher in the Midwest, 16.3% higher in the South, and 19.0% higher in the West, according to the NAHB.
The NAHB also said that single-family homes that are allowed but not allowed are now declining – to 144,000 compared to 154,000 in October. However, they are still 38.5% higher than a year ago.