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Numbers for single-family home construction remained flat in May with a 675,000 seasonally adjusted annual rate, but permits are signaling a promising growth. Single-family permits jumped nearly 12% last month, 1.8% higher than what they were in 2019, according to NAHB. Multifamily construction increased 15% in May as well, yet its future is not as bright as single-family construction. The predictions were high for single-family starts leading into 2020, but nothing could predict the impact COVID-19 would have on homebuilding. Single-family sector numbers may bring relief for the remaining months.
Since the peak rate in February, the pace of single-family construction has declined 35% as of May. As an indication of how strong the start was for single-family construction in 2020, single-family starts on a year-to-date basis are down just 2.4% relative to the comparable 2019 totals. Thus far, single-family starts are down on a year-to-date basis 23% in the Northeast, 3% in the Midwest, and 3% in the South, but are 4% higher in the West (led by the fast growing Mountain states).
Construction starts for the multifamily sector, which includes apartment buildings and condos, increased 15% to a 299,000 pace in May. This reflects a 52% decline for multifamily construction relative to the strong January pace at the start of 2020. NAHB’s forecast calls for multifamily construction to decline more than single-family construction as a result of the 2020 downturn.
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