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Breaking Flooring NewsResidential Flooring

Single-Family Starts Post Double-Digit Growth in 2021

Single Family Starts.jpg
January 19, 2022

While single-family starts dipped in December due to ongoing supply-side challenges, they still managed to post double-digit gains in 2021. Overall housing starts increased 1.4% in December to a seasonally adjusted annual rate of 1.70 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The December reading of 1.70 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.3% to a 1.17 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 10.6% to a 530,000 pace.

Total housing starts for 2021 were 1.60 million, a 15.6% gain over the 1.38 million total from 2020. Single-family starts in 2021 totaled 1.12 million, up 13.4% from the previous year. Multifamily starts (5+) in 2021 were up 22.1% compared to the previous year.

"The price and availability of building materials, and the supply chain in general, remains the most pressing, immediate challenge for builders as they seek to add housing supply," said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Florida. "Policymakers must focus on easing production bottlenecks and eliminating tariffs on Canadian lumber to help address the issues builders are currently facing."

"The double-digit gain for single-family starts in 2021 was a continuation of the rebound and expansion of home building that took place in the wake of the pandemic," said NAHB Chief Economist Robert Dietz. "However, as mortgage interest rates are rising and construction costs increase, affordability headwinds are steepening. NAHB's outlook for 2022 calls for relatively flat conditions for single-family construction, with additional gains for multifamily and remodeling."

On a regional and year-to-date basis (January through December of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 22.2% higher in the Northeast, 10.9% higher in the Midwest, 15.3% higher in the South and 16.9% higher in the West.

Overall permits increased 9.1% to a 1.87 million unit annualized rate in December. Single-family permits increased 2.0% to a 1.13 million unit rate. Multifamily permits increased 21.9% to a 745,000 pace.

Looking at regional permit data on a year-to-date basis, permits are 22.4% higher in the Northeast, 14.4% higher in the Midwest, 16.3% higher in the South and 19.0% higher in the West.

Single-family homes permitted but not authorized are now declining - down to 144,000 compared to 154,000 in October. However, they are still up 38.5% compared to a year ago.

KEYWORDS: multifamily housing National Association of Home Builders (NAHB) single-family housing

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