Residential Real Estate News
Supply Chain Issues a Drag on New Home Starts in September
According to a new report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, single-family housing production held steady in September 2021, as strong demand helped to offset ongoing building material supply chain disruptions. Meanwhile, declines in multifamily production helped to push overall housing starts in September down 1.6% to a seasonally adjusted annual rate of 1.56 million.
The September reading of 1.56 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 were essentially unchanged from the previous month at a 1.08 million seasonally adjusted annual rate, and are up 20.5% year-to-date. The multifamily sector, which includes apartment buildings and condos, decreased 5.0% to a 475,000 pace.
"Single-family construction continued along recent, more sustainable trends in September," said Chuck Fowke, chairman of the National Association of Home Builders. "Lumber prices have moved off recent lows, but the cost and availability of many building materials continues to be a challenge for a market that still lacks inventory. Policymakers should continue to work to improve supply-chains."
"Builder confidence increased in October, which confirms stabilization of home construction at current levels," said NAHB Chief Economist Robert Dietz. "The number of single-family units in the construction pipeline is 712,000, almost 31% higher than a year ago as more inventory is headed to market. Multifamily construction has expanded as well, with almost a 6% year-over-year gain for apartments currently under construction."
On a regional and year-to-date basis (January through September of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 28.9% higher in the Northeast, 12.1% higher in the Midwest, 18.6% higher in the South and 22.6% higher in the West.
Overall permits decreased 7.7% to a 1.59 million unit annualized rate in September. Single-family permits decreased 0.9% to a 1.04 million unit rate. Multifamily permits decreased 18.3% to a 548,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 19.6% higher in the Northeast, 19.9% higher in the Midwest, 22.9% higher in the South and 25.0% higher in the West.
