Residential Real Estate News
Housing Starts Spike 15 Percent in America in Late 2024
A new report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reveals that housing starts rose by 15.8% in December, reaching a seasonally adjusted annual rate of 1.50 million units -- the highest level since February 2024.
Driven by strong demand, single-family construction saw growth in December 2024, despite ongoing challenges such as high mortgage rates, elevated financing costs for builders, and a limited supply of buildable lots.
The December 2024 figure of 1.50 million represents the number of housing units builders would begin if the current pace continued for 12 months. Within this total, single-family starts rose by 3.3%, reaching a 1.05 million annual rate, while multifamily starts -- including apartments and condos -- jumped 61.5% to a 449,000-unit pace.
For 2024, total housing starts reached 1.36 million, a 3.9% decline from 2023's 1.42 million units. Single-family starts grew by 6.5% to 1.01 million, while multifamily starts fell by 25% compared to the previous year.
"Single-family home building increased by 6.5% in 2024 as builders responded to a persistent housing affordability crisis caused by elevated mortgage rates and higher construction costs," said Carl Harris, chairman of the National Association of Home Builders (NAHB). "Looking ahead, the industry expects modest growth in single-family construction in 2025, supported by a housing shortage and favorable economic conditions."
NAHB Chief Economist Robert Dietz noted that while December 2024 was a strong month for apartment starts, the multifamily sector experienced a 25% decline in starts for 2024. "In December, for every apartment beginning construction, 1.7 apartments were completing construction, based on a three-month moving average. Multifamily construction is expected to stabilize later in 2025 as more projects become financially viable, aided by a low national unemployment rate."
Regionally, combined single-family and multifamily housing starts for 2024 increased by 9.1% in the Northeast but declined in other regions: 0.1% in the Midwest, 5.2% in the South, and 7.7% in the West.
Overall, housing permits dipped by 0.7% in December to a seasonally adjusted annual rate of 1.48 million units, marking a 3.1% decline compared to December 2023. Single-family permits increased by 1.6% to 992,000 units but were down 2.5% year-over-year. Multifamily permits fell by 5.0% to a 491,000-unit pace.
For 2024, permits saw regional variations: up 1.5% in the Northeast and 3.5% in the Midwest, but down 3.1% in the South and 6.6% in the West. Total permits for the year were 1.47 million, a 2.6% decrease from 2023, while single-family permits rose by 6.6% to 981,000, signaling potential growth in 2025.
The number of single-family homes under construction declined by 5.3% year-over-year to 641,000. Meanwhile, apartments under construction fell by 21% to 790,000, down from a peak of 1.02 million in July 2023, continuing a downward trend.
