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As a housing shortage threatens affordability in nearly every regional market across the U.S., builders are ramping up new construction to keep up with rising demand. Privately-owned housing starts reached a seasonally adjusted annual rate of 1,638,000 in January, a 0.8% year-over-year gain, according to Bill McBride’s CalculatedRisk Newsletter.
Single-family authorizations and privately-owned housing units authorized by building permits both increased in January 2022, causing a slight year-over-year increase in total housing starts. Despite supply chain disruptions, labor shortages, and major price increases for building materials, single-family units under construction are at the highest level since December 2006, while multifamily units are up to the highest level since July 1974.
For single family, many of these homes are already sold (Census counts sales when contract is signed). The reason there are so many homes is probably due to construction delays. Since many of these are already sold, it is unlikely this is “overbuilding”, or that this will impact prices (although the buyers will be moving out of their current home or apartment once these homes are completed).
Blue is for 2+ units. Currently there are 758 thousand multi-family units under construction. This is the highest level since July 1974! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.
