Single-Family and Multifamily Ends 2021 With Strong Demand for New Construction

 

The U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported that both single-family and multifamily production increased 11.8% to an annual rate of 1.68 million units. The strong production stems from the high demand for new construction in the housing industry.

This means that 1.68 million homes will be started in the development stage if this pace kept up for the next year. Separated out, single-family increased to 11.3% to 1.17 million seasonally adjusted annual rate and multifamily increased 12.9% at a 506,000 seasonally adjusted annual rate.

Compared to the same time frame of 2020, on a regional and year-to-date basis (January through November of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 24.4% higher in the Northeast, 9.6% higher in the Midwest, 15.4% higher in the South and 19.4% higher in the West.

As far as permits, they increased 3.6% to 1.17 million. Single-family permits rose 2.7% to 1.10 million and multifamily increased 5.2% to 609,000 annual paces.

“Mirroring gains in the HMI reading of builder sentiment, single-family housing starts accelerated near the end of 2021 and are up 15.2% year-to-date as demand for new construction remains strong due to a lean inventory of resale housing,” said NAHB Chairman Chuck Fowke. “Policymakers need to help alleviate ongoing building material supply chain bottlenecks that are preventing builders from keeping up with buyer demand.”

“Breaking an eight-year trend, in recent months there have been more single-family homes under construction than multifamily units,” said NAHB Chief Economist Robert Dietz. “Moreover, despite some cooling earlier this year, the continued strength of single-family construction in 2021 means there are now 28% more single-family homes under construction than a year ago. These gains mean single-family completions will increase in 2022, bringing more inventory to market despite a 19% year-over-year rise in construction material costs and longer construction times.”

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Suburban and Exubran Communities See The Fastest Home Building Activity

 

The pandemic has not only changed buyers' perspectives on what they want in a home but also where they want their home to be located. More and more buyers are searching in the suburbs away from crowded urban areas. Surprisingly the multifamily sector is seeing more new home starts in the suburbs and lower-cost markets.

According to the NAHB's current Home Building Geography Index (HBGI) multifamily construction saw double-digit percentage gains in suburban areas in the second quarter of 2021. Large metro areas saw a decline in multifamily new starts. Multifamily residential construction rose 14.3% in small metro urban cores and 25.5% in small metro suburban areas while large metro core areas saw a 0.5% decline.

“The trend of construction shifting from high-density metro areas to more affordable regions, which accelerated at the beginning of the pandemic early last year, appears to be continuing,” said NAHB Chairman Chuck Fowke. “Lower land and labor costs, and lower regulatory burdens in suburban and exurban markets make it more appealing to build in these communities. And workers are increasingly flocking to these areas due to expanded teleworking practices and lower housing costs.”

If you are in the market to purchase a home, now is the time. Get in touch with a Realtor in your local community who can help you with the process.

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U.S. Regions Sees April Single-Family Permit on the Rise

 

The housing market is still booming, the first four months of 2021 the total number of single-family permits that were issued year-to-date among the country rose to 384,196. This makes a 35.6% increase over April 2020's number.

Year-to-date ending April 2021 there was an increase in all U.S. regions in single-family permits. The Midwest had the highest at 49.8%, the Northeast 48.6%, the West 37.7% and the South 30.9%. Multifamily permits were also very healthy. The highest in the Northeast with 45.8%, South 27.7%, West 34.4% and the Midwest 18.4%.

Within the 50 states and the District of Columbia, the increase from April 2020 YTD and April 2021 YTD in single-family permits were seen across the board. The highest rate came in at 332.1% in the District of Columbia. The jump was from 28 single-family permits in April 2020 to 121 single-family permits in April 2021. The ten highest states combined made up 62% of the total single-family permits issued were Alaska, South Dakota, Pennsylvania, Michigan, Minnesota, Vermont, Maine, New York, Wyoming and Utah.

The top 10 local metro areas in both single-family permits and multifamily permits were different. Single-family permits were the highest in Houston, Tx, Dallas-Fort Worth-Arlington, Tx, Phoenix-Mesa-Scottsdale, Az, Atlanta-Sandy Springs-Roswell, Ga, Austin-Round Rock, Tx, Tampa-St. Petersburg-Clearwater, Fl, Charlotte-Concord-Gastonia, Nc-Sc, Nashville-Davidson-Murfreesboro-Franklin, Tn, Orlando-Kissimmee-Sanford, Fl and Jacksonville, Fl. Multifamily permits were the highest in New York-Newark-Jersey City, Ny-Nj-Pa, Austin-Round Rock, Tx, Dallas-Forth Work-Arlington, Tx, Los Angeles-Long Beach-Anaheim, Ca, Seattle-Tacoma-Bellevue, Wa, Washington-Arlington-Alexandria, Dc-Va-Md-Wv, Philadelphia-Camden-Wilmington, Pa-Nj-De-Md, Minneapolis-St. Paul-Bloomington, Mn-Wi, Houston-The Woodlands-Sugar Land, Tx and Denver-Aurora-Lakewood, Co.

Now is a great time to purchase a home. If you are in the market for a new home, contact a local Realtor today.

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