Housing starts increase while supply issues linger
Washington, DC – Total housing projects rose 6.3% in June to a seasonally adjusted annual rate of 1.64 million units, according to a report from the US Department of Housing and Urban Development and the US Census Bureau. Despite the increase in housing production, there is concern about the declining number of permits for both the single-family and multi-family markets.
According to the National Association of Home Builders (NAHB), the June reading of 1.64 million starts is the number of home builders who would start if development continued at this pace over the next 12 months. Within the total number, the number of single-family homes rose by 6.3% to a seasonally adjusted annual figure of 1.16 million. The multi-family sector, which includes condominiums and condominiums, grew 6.2% to a pace of 483,000.
“While timber prices have recently begun to decline, builders are still dealing with rising prices of other building materials such as oriented strand board and major delays in the delivery of these goods,” said Chuck Fowke, president of NAHB. “We are grateful that the White House recently held a meeting to seek solutions to these supply chain issues that are hurting housing affordability.”
Robert Dietz, chief economist at NAHB, added: “The recent weakening of single-family and multi-family permits is due to higher material costs, which have pushed new home prices up since late last year. This is a disturbing sign for future housing construction. That is a challenge for a housing market that needs extra inventory.”
On a regional and year-to-date basis (January to June 2021 compared to the same period a year ago), combined single-family and multi-family starts are 41.4% higher in the Northeast, 25.5% higher in the Midwest, 21.5 % higher in the south and 28% higher in the west.
The total number of licenses fell by 5.1% in June to 1.60 million units year on year. Single family permits decreased 6.3% to a unit rate of 1.06 million. Multi-family permits fell 2.6% to a pace of 535,000.
Looking at year-over-year regional permit data, permits are 33.2% higher in the Northeast, 31.9% higher in the Midwest, 29.6% higher in the South and 32.2% higher in the West.
The number of single-family homes currently under construction is 675,000, up 32% from a year ago. The number of multi-family houses under construction has increased by 2% to 684,000 apartments.