Single-family starts jump ahead
Single-family housing starts surged ahead at the end of 2022.
The latest New Monthy Residential Construction report, released this morning by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, indicates single-family starts jumped 11.3% in December 2022 to a rate of 909,000 from the revised November figure of 817,000.
Combined starts dipped 1.4% to a seasonally adjusted annual rate of 1.382 million from a revised November estimate of 1.401,000 million. The latest report is also 21.8% below the December 2021 rate of 1.768 million.
An estimated 1,553,300 housing units were started in 2022. This is 3% below the 2021 figure of 1.601 million.
The December rate for units in buildings with five units or more was 463,000, plunging nearly 19% from the previous month and a rate of 571,000. On a year-over-year basis, the rate dropped 16.3% compared to 553,000 in December 2021.
“Even though single-family starts are up on a monthly basis, permits indicate that the housing market will slow down further in 2023,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “We expect a sustainable decline for mortgage rates in the second half of this year, which should lead to a housing recovery in 2024.”
Single-family permits for December 2022 declined 6.5% to a rate of 730,000 from the revised November figure of 781,000.
Overall housing permits slipped 1.6% to a seasonally adjusted annual rate of 1.330 million compared to the revised November rate of 1.351,000.
The latest figure is 29.9% below the December 2021 rate of 1,896,000.
Authorizations for buildings with five units or more were at a rate of 555,000 in December rising 7.1% from the prior month and a rate of 551,000. On a year-over-year basis multifamily permits fell 21.8% from 710,000 in December 2021.
An estimated 1,649,400 housing units were authorized by building permits in 2022, which is a 5% decline from the 2021 figure of 1.737 million.
“The decline in single-family permits indicates that builders are slowing construction activity as interest rates have spiked in recent months,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “Starts began on a strong footing in early 2022 but fell back in the latter part of the year as higher costs led to a pause in home building activity and affordability conditions worsened for home buyers.”
Regionally on a year-over-year basis, combined single-family and multifamily starts are 5% higher in the Northeast, 5.7% lower in the Midwest, 1.6% lower in the South, and 7.2% lower in the West.
Permits are 13.6% lower in the Northeast, 3.4% lower in the Midwest, 2.4% lower in the South, and 8.3% lower in the West.
