Housing Activity Ends On A High Note In 2021

Last year, an estimated 1.6 million housing units were started, representing a 15.6 percent increase over 2020.

According to the final new residential construction report for 2021 from the U.S. Census Bureau and the Department of Housing and Urban Development, an estimated 1,595,100 housing units were started in 2021, a 15.6 percent increase from the 2020 figure of 1,379,600.

Privately-owned housing starts were at a seasonally adjusted annual rate of 1,702,000 in December, which is 1.4 percent higher than the revised November estimate of 1,678,000 and 2.5 percent higher than the December 2020 rate of 1,661,000.

Last month, single-family housing starts were at a rate of 1,172,000, 2.3 percent lower than the revised November figure of 1,199,000.

The December rate for units in buildings of five or more units was 524,000.

“Today’s new residential construction report from the Census Bureau showed that housing activity ended 2021 on a strong note, with construction starts rising 1.4% over the month of December,” said Doug Duncan, chief economist at Fannie Mae.

“For the year, total housing starts registered at 1.6 million units, the highest annual pace since 2006.”

“Helping drive last year’s strength was the impressive resilience of multifamily starts, which recorded its highest annual total since 1987.”

In 2021, an estimated 1,337,800 housing units were completed, a 4% increase from the figure of 1,286,900 in 2020.

The seasonally adjusted annual rate of housing completions in December was 1,295,000, which is 8.7 percent lower than the revised November estimate of 1,418,000 and 6.6 percent lower than the December 2020 rate of 1,386,000.

Last month’s single-family housing completions were 990,000, or 3.9 percent higher than the revised November rate of 953,000.

The December rate for units in buildings of five or more units was 299,000.

Finally, building permits are expected to authorize 1,724,700 housing units in 2021, a 17.2 percent increase from the figure of 1,471,100 in 2020.

Privately-owned housing units authorized by building permits were at a seasonally adjusted annual rate of 1,873,000 in December, 9.1 percent higher than the revised November rate of 1,717,000 and 6.5 percent higher than the December 2020 rate of 1,758,000.

Last month’s single-family authorizations totaled 1,128,000, a 2% increase over the revised November figure of 1,106,000.

Unit authorizations in buildings with five or more units were at a rate of 675,000.

“Looking forward to 2022, the good news for the single-family products is the number of permitted but not yet started housing units is up 38.5% from the same time last year,” said Nikolas Scoolis, manager, housing economics at Zonda.

“Similarly, single-family units under construction are up 26% over that same period.”

“Both stats indicate that builders are attempting to meet the demand in the market by significantly increasing inventory despite labor and supply chain issues hindering their ability to do so.”