Single-family Starts Post Double-digit Percentage Gain in 2021
While single-family starts dipped in December due to ongoing supply-side challenges, they still managed to post double-digit gains in 2021. Overall housing starts increased 1.4 percent in December to a seasonally adjusted annual rate of 1.70 million units, according to a report from 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 housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.3 percent to a 1.17 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 10.6 percent to a 530,000 pace.
Total housing starts for 2021 were 1.60 million, a 15.6 percent gain over the 1.38 million total from 2020. Single-family starts in 2021 totaled 1.12 million, up 13.4 percent from the previous year. Multifamily starts (5+) in 2021 were up 22.1 percent 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 as they seek to add housing supply," says Chuck Fowke, chairman of the National Association of Home Builders. "Policymakers must focus on easing production bottlenecks and eliminating tariffs on Canadian lumber to help address the issues builders are currently facing."
"The double-digit gain for single-family starts in 2021 was a continuation of the rebound and expansion of home building that took place in the wake of the pandemic," says Robert Dietz, NAHB chief economist. "However, as mortgage interest rates are rising and construction costs increase, affordability headwinds are steepening. NAHB's outlook for 2022 calls for relatively flat conditions for single-family construction, with additional gains for multifamily and remodeling."
Overall permits increased 9.1 percent to a 1.87 million unit annualized rate in December. Single-family permits increased 2 percent to a 1.13 million unit rate. Multifamily permits increased 21.9 percent to a 745,000 pace.
Single-family homes permitted but not authorized are down to 144,000 compared to 154,000 in October. However, they are still up 38.5 percent compared to a year ago.