The Current Housing Market Sees More Construction of Single Family Homes Over Multifamily

 This has been a whirlwind of a housing market since the pandemic began. It has been nine years since the number of single-family homes under construction is higher than multifamily construction. Robert Dietz, the National Association of Home Builders Chief Economist reported that up until 2008 that was the norm. Then the financial crisis that led to the Great Recession hit and homeowners moved to rentals in droves. 

The pandemic could be why this trend has taken over. People wanted to get away from the dense areas and were moving out of apartments. More and more people were looking for a single-family home for space to work and school from home. Since the pandemic will this still hold up to be the case?

Multifamily housing starts were 17% higher from 2020. This shows a sign that multifamily construction will start to come back. If homeowners want to go back to living in metro areas, these communities cannot support a large amount of single-family construction. Millennials are the big chunk of first-time homebuyers and cannot afford a single-family home in this housing market. Multifamily units are more cost effcient when it comes to construction and renting. This will probably put multifamily construction back into the lead.

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Huge Gains in Housing Starts From October 2021 to November 2021

 The U.S.Department of Housing and Urban Development and the U.S. Census Bureau reported an 11.8% rise month-over-month to a seasonally adjusted rate of 1.68 million units from October 2021 to November 2021. The increase showed a double-digit gain caused by the low housing inventory and rising builder confidence. Single-family homes saw an increase of 11.3% to 1.17 million units and multifamily new construction saw an increase of 12.9% to 506,000 units.

“Breaking an eight-year trend, in recent months there have been more single-family homes under construction than multifamily units,” National Association of Home Builders chief economist Robert Dietz said in a statement. “Moreover, despite some cooling earlier this year, the continued strength of single-family construction in 2021 means there are now 28% more single-family homes under construction than a year ago. These gains mean single-family completions will increase in 2022, bringing more inventory to market despite a 19% year-over-year rise in construction material costs and longer construction times.”

"Mirroring gains in the HMI reading of builder sentiment, single-family housing starts accelerated near the end of 2021 and are up 15.2% year-to-date as demand for new construction remains strong due to a lean inventory of resale housing,” Chuck Fowke the chairman of the NAHB said in a statement.

“The bottom line is we need more homes and it will take time to reduce the housing stock ‘debt’ in the face of growing demand,” First American deputy chief economist Odeta Kushi said in a statement. “But today’s housing starts report, in combination with a positive builder’s sentiment report, sends an optimistic message about the housing market as we enter 2022.”

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This Summer Saw a Gain in Single-Family Permit Gains

 

This summer saw a booming housing market. The year-over-year increase in single-family permits was 29.7% over July 2020. In July 2020 there were 525,623 single-family permits issued and in July 2021 there were 681,959 issued.

The uptick was also seen across the country in all four regions year-to-date in July 2021. The Northeast had the highest increase in single-family permits with 32.2%, followed by the south with a 30.4% increase, the West had a 29.8% and the Midwest came in the lowest bust till strong at 25.8%. AS for multifamily permits issued the West was the strongest at 29.8%, Northeast had a 25.6% increase, the South 18% and the Midwest with a 15.7%.

All 50 states and the District of Columbia had growth from July 2020 YTD and July 2021 YTD in single-family permits issued. The highest growth was in the District of Columbia with a 226.1% increase from 65 to 225. The highest 10 states made up 62.4% of the countries total.

Multifamily permits also saw an increase from 270,338 in July 2020 to 328,483 issued in July 2021 which was reported as a 21.5% increase. Thirty-eight states saw growth in multifamily permits while 12 states and the District of Columbia had a decline. New Mexico was the highest with a 295.8% increase from 427 to 1,690. Connecticut had the worst decline from 1,708 to 927 which was a 45.7% decrease. The top ten states totaled 63.2% of the multifamily permits issued.

Top Ten Metro Areas Issued Highest Number of  Single-Family Permits

Metropolitan Statistical Area	Single-family Permits: Jan (Units #YTD, NSA)
Houston-The Woodlands-Sugar Land, TX	32,134
Dallas-Fort Worth-Arlington, TX	32,017
Phoenix-Mesa-Scottsdale, AZ	22,420
Atlanta-Sandy Springs-Roswell, GA	20,352
Tampa-St. Petersburg-Clearwater, FL	1,954
Austin-Round Rock, TX	15,427
Charlotte-Concord-Gastonia, NC-SC	11,493
Orland-Kissimmee-Sanford, FL	10,314
Jacksonville, FL	9,949
Nashville-Davidson–Murfreesboro–Franklin, TN	9,993

 

 

Top Ten Metro Areas Issued Highest Number of  Multifamily Permits

 

Metropolitan Statistical Area	Multifamily Permits: Jan (Units #YTD, NSA)
New York-Newark-Jersey City, NY-NJ-PA	24.685
Dallas-Fort Worth-Arlington, TX	16,796
Austin-Round Rock, TX	16,170
Los Angeles-Long Beach-Anaheim, CA	12,565
Seattle-Tacoma-Bellevue, WA	10,573
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	10,307
Miami-Fort Lauderdale-West Palm Beach, FL	9,090
Phoenix-Mesa-Scottsdale, AZ	9,055
Nashville-Davidson–Murfreesboro–Franklin, TN	8,412
Houston-TheWoodlands-Sugar Land, TX	8,348

 

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