Single-Family Starts Edge Slightly Higher
Housing starts increased 5.2% in July but affordability remains a challenge. Combined single- and multifamily starts fell 2.4% in the South YTD.
WASHINGTON — Single-family housing starts posted a modest gain in July as builders continue to contend with challenging housing affordability conditions and a host of supply-side headwinds, including labor shortages, elevated construction costs and inefficient regulatory costs.
Led by solid multifamily production, overall housing starts increased 5.2% in July to a seasonally adjusted annual rate of 1.43 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The July reading of 1.43 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 2.8% to a 939,000 seasonally adjusted annual rate and are down 4.2% on a year-to-date basis. The multifamily sector, which includes apartment buildings and condos, increased 9.9% to an annualized 489,000 pace.
“Single-family production continues to operate at reduced levels due to ongoing housing affordability challenges, including persistently high mortgage rates, the skilled labor shortage and excessive regulatory costs,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, N.C. “These headwinds were reflected in our latest builder survey, which indicates that affordability is the top challenge to the housing market.”
“The slowdown in single-family home building has narrowed the home building pipeline,” said NAHB Chief Economist Robert Dietz. “There are currently 621,000 single-family homes under construction, down 1% in July and 3.7% lower than a year ago. This is the lowest level since early 2021 as builders pull back on supply.”
On a regional and year-to-date basis, combined single-family and multifamily starts were 10.2% higher in the Northeast, 17.7% higher in the Midwest, 2.4% lower in the South and 0.5% lower in the West.
Overall permits decreased 2.8% to a 1.35-million-unit annualized rate in July. Single-family permits increased 0.5% to an 870,000-unit rate and are down 5.8% on a year-to-date basis. Multifamily permits decreased 8.2% to a 484,000 pace.
Looking at regional permit data on a year-to-date basis, permits were 16.6% lower in the Northeast, 9.1% higher in the Midwest, 3.4% lower in the South and 5.1% lower in the West.
Source: NAHB
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