Single-Family Starts Gain While Multifamily Fails

Ongoing low levels of single-family existing home inventory boosted single-family output in November, while overall housing production declined due to a double-digit percentage reduction in multifamily building.

Housing starts fell 1.8% in November to a seasonally adjusted annual pace of 1.29 million units, according to a report released by the United States Department of Housing and Urban Development and the United States Census Bureau.

The November value of 1.29 million starts represents the number of housing units that would be built if construction continued at this rate for the next year.

Within this total, single-family starts climbed by 6.4% to 1.01 million seasonally adjusted annual rate.

Single-family home development has increased by 7.2% year to date. The multifamily sector, which includes apartment complexes and condos, fell by 23.2% to an annualized 278,000 pace.

While the pace of single-family starts improved in November, single-family permitting remained flat as builders faced mixed market conditions, including an election result that promised regulatory relief but continued high mortgage rates.

NAHB predicts a minor increase in single-family starts in 2025 as builders’ financing conditions improve marginally.

The large reduction in apartment building is expected to halt next year, with the market normalizing in the latter half of 2025.

Regionally and year-to-date, total single-family and multifamily starts are 7.3% higher in the Northeast, 2.4% lower in the Midwest, 5.8% lower in the South, and 5.9% lower in the West.

In November, overall permits grew by 6.1% to a yearly rate of 1.51 million units. Single-family permits increased 0.1% to 972,000 units, up 8.0% year to date. Multifamily permits grew by 19.0% to an annual rate of 533,000.

Looking at year-to-date regional data, permits are 3.2% higher in the Northeast, 4.8% higher in the Midwest, 2.5% lower in the South, and 7.0% lower in the West.

The number of single-family homes under construction has fallen 6.3% from a year ago, to 637,000. The number of multifamily apartments under construction is down 20.5% from a year ago, to 797,000.

In November, two multifamily units were completed for every unit that began construction.

Two years ago, only 0.7 multifamily units were completed for every one unit that began construction.

The number of multifamily units in 5-plus unit complexes that have finished construction is up 36.1% year to far in 2024.

In comparison, single-family completions have increased by 3.6% year to date.

[Read more about this topic on Eyeonhousing.org]