Housing Production Makes Healthy Gains to Start New Year
By NAHB (National Association of Home Builders)
A surge in multifamily production pushed overall housing starts up 9.7% in January to a seasonally adjusted annual rate of 1.33 million units after an upwardly revised December reading, according to newly released data from HUD and the Commerce Department.
Multifamily starts rose 23.7% to a seasonally adjusted annual rate of 449,000 units. Meanwhile, single-family production posted a healthy 3.7% gain to 877,000 units.
“The growth in production is in line with our reports of solid builder confidence in the housing market,” said NAHB Chairman Randy Noel. “A pro-business regulatory climate and increasing housing demand are boosting builders’ optimism, even as they continue to face supply-side hurdles such as rising construction material prices and access to lots and labor.”
“Demand for owner-occupied housing is rising due to favorable demographic tailwinds and a healthy labor market. Increases in after-tax incomes should help prospective buyers save for a downpayment on a home,” said NAHB Chief Economist Robert Dietz. “As consumers continue to enter the single-family market, we should see builders increase production to meet this demand.”
Regionally in January, combined single- and multifamily housing production increased 45.5% in the Northeast, 10.7% in the West, and 9.3% in the South. Starts fell 10.2% in the Midwest.
Overall permit issuance rose 7.4% to a seasonally adjusted annual rate of 1.4 million units, which is a post-recession high. Multifamily permits registered a 26.5% gain to 530,000 while single-family permits edged down 1.7% to 866,000.
Permit issuance rose 92.5% in the South and 17.1% in the West. Permits declined 2.6% in the Midwest and 21.7% in the Northeast.