As builders continue to report supply chain issues that are causing construction delays, overall housing starts fell 4.1% to a seasonally adjusted annual rate of 1.64 million units, according to a US Department of Housing and Urban Development (HUD) and US report. Census Bureau. However, a sign of strong demand, building permits rose at a steady pace in January.
January’s reading of 1.64 million housing starts is the number of housing unit builders that would start if development maintained that pace for the next 12 months. Within that overall number, single-family home starts fell 5.6% to a seasonally-adjusted annual rate of 1.12 million. The multifamily sector, which includes apartment buildings and condos, fell 0.8% to an annualized pace of 522,000.
“The market needs more housing, but chronic production bottlenecks, including continued increases in lumber and OSB prices, continue to drive up housing costs and hurt affordability. housing,” said Jerry Konter, president of the National Association of Home Builders (NAHB) and a builder. and developer from Savannah, Georgia. “In fact, the number of single-family homes under construction continues to increase as construction cycle times increase due to delays in the delivery of building materials.”
“While single-family housing starts fell in January, rising permits, along with solid builder sentiment, as measured in recent monthly surveys, suggest a positive start to the year given the recent surge. mortgage rates,” said NAHB chief economist Robert Dietz. “The average 30-year mortgage rate went from 3.1% to 3.45% from December to January. Fueled by rising mortgage rates and construction costs, declining housing affordability will continue to affect the residential construction market in 2022.”
On a regional basis from the previous month, single-family and multi-family housing starts combined are up 2.6% in the Northeast, down 37.7% in the Midwest, down 2.0% in the South and up 17.7% in the West.
Overall permits rose 0.7% to an annualized rate of 1.90 million units in January. Single-family permits rose 6.8% to 1.21 million units. Multifamily permits fell 8.3% to an annualized pace of 694,000.
Looking at regional permit data from the previous month, permits are down 48.3% in the Northeast, 0.7% in the Midwest, 11.4% in the South and 13. 9% in the west.
There are now 785,000 single-family homes under construction, a 26.8% year-over-year gain. There are 758,000 multi-family dwellings under construction, a gain of 14%.