Privately owned housing starts in November sunk slightly by 0.5% at 1,427,000 which is lower than October’s 1,434,000. Overall its 16.4% lower than November 2021 which had a rate of 1,706,000.
Starts in single-family housing also took a dip in November by 4.1% at a rate of 828,000 which was again lower than in October which had a rate of 863,000.
According to reports from the U.S. Census Bureau, there was a sharp decline in multi-family unit permits in November. Typically averaging close to 650,00 it took a nose dive to 509,000 in November.
Despite the lack of permits, multi-family starts jumped in November compared to October. Where single-family starts have been decreasing every year by roughly 32%, multi-family starts have been increasing every year by 23%.
In total housing starts will be down 3% come the end of the year.
Housing construction is hitting an all-time high with a joined 1.709 million units under current construction. Broken down, single-family homes under construction have reached 777 thousand. Though this is a drop from their peak in spring and also low from the last 7 months in general. Multi-family homes, however, have hit a record since 1973 with 963 thousand units currently under construction.
Most of this is due to delays. Home construction companies are still struggling with labor shortages and exuberant materials prices due to unavailability.
With how the housing market has been short on homes to meet demand, this upturn in multi-family construction should alleviate some of that strain. It won’t completely fix it as still more units will be necessary to level out the numbers. As the numbers get met, there is a possibility that rent hikes will falter over the coming year. Still, it’s considered unlikely.
It’s expected for multi-family starts to actually slow soon due to interest rates and lack of growth. Single-family starts are the overall consistent weakness and construction for single-family homes is slowing dramatically. Construction is predicted to slow overall in 2023 despite a large number of completed constructions that will be delivered come the new year.