Housing Starts Strong in November; Multifamily Seeing Growth in Suburbs

More housing is on its way for 2022.

According to the National Association of Home Builders, single-family housing starts grew in November despite continuing challenges in both supplies and labor. Housing starts grew 11.8% to a seasonally adjusted annual rate of 1.68 million. This raises housing starts 15.2% year over year. There are now 752,000 single-family homes under construction, up 28% from a year ago.

However, supply chain issues are still causing issues in the industry, there are 152,000 homes that have been authorized to start, but construction has yet to begin due to lack of supplies. This is an increase of 40.7% from a year ago. Yet, single-family builder confidence remained stable throughout December, down slightly from November due to repeated concerns about supply chain issues and labor shortages, both of which are expected to slow down in 2022. Overall, permits are up 13.6% year over year in the Northeast.

Multifamily starts, including condos and apartment buildings also saw an increase, jumping 12.9%. As demand for more rental properties increases and with rent prices continuing to rise, the sector is expected to have a strong 2022. Currently, there are about 734,000 apartments under construction, an increase of 11% year to year. There has also been an increase of multifamily permits in more suburban markets. According to NAHB, the share of multifamily permits in large metro areas dropped from 40.5% to 37.9% in the third quarter, while the share of permits in small metro areas rose 24.9% to 27.2% in the same time period. The suburbs of small cities saw multifamily permits rise 56% year over year.