Single-Family Housing Starts Decline in November

house on chart showing decrease in statistics

Amid growing affordability concerns, the number of single-family housing starts fell in November. Despite overall housing starts getting a small boost last month, the number of single-family housing starts fell 4.6 percent to 824,000 units.

According to the National Association of Home Builders (NAHB), data from the U.S. Department of Housing and Urban Development (HUD) and the Commerce Department showed overall housing starts increasing 3.2 percent in November to a seasonally adjusted annual rate of 1.26 million units. This is in comparison to a downwardly revised October reading. Year-to-date, new housing starts are 5.1 percent above their level over the same period last year.

Single-family home production has now hit the third straight month of declines. By contrast, multifamily housing starts—which include apartment buildings and condos—gained 22.4 percent to 432,000 units.

“The decline in single-family production over the last few months makes sense given the drop in our builder confidence index,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Builders are cautious to add inventory as housing affordability concerns are causing consumers to pause on making a home purchase.”

Although the market initially saw favorable signs for homeownership about two years ago, NAHB Chief Economist Robert Dietz now cautions that the upward trajectory could change due to home price gains.

“Favorable demographics support healthy housing demand, so it is frustrating that the housing affordability crisis is preventing many consumers from achieving their goal of buying a home,” said Dietz. “While homeownership has increased over the last nine quarters, we can expect that upward momentum to stop due to rising home costs. Because housing leads the economy, we need to stabilize residential market conditions.”

Permits by the Numbers

Overall building permits, which are an indicator of future housing production, gained 5 percent in November to 1.39 million. Single-family permits crawled up 0.1 percent to a pace of 848,000 units. Multifamily permits got a 14.8 percent boost to an annualized rate of 480,000.

Regional Differences – Starts and Permits

Combined single-family and multifamily housing starts rose 11 percent in the West and 5.3 percent in the South. Meanwhile, starts decreased 0.8 percent in the Northeast and 1.9 percent in the Midwest.

On a year-over-year basis, issuance of permits rose 8.2 percent in the South and 3.2 percent in the West. Permits fell 2.7 percent in the Midwest and 2.8 percent in the Northeast.

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