More single-family and multifamily homes are coming onto the market soon as new-home construction posts its biggest gains in 13 years. Total housing starts rose nearly 17% in December to a seasonally adjusted annual rate of 1.61 million units, the U.S. Commerce Department reports.
Broken out, starts for single-family homes rose 11.2% to a seasonally adjusted annual rate of 1.06 million in December. The multifamily sector, which includes apartment buildings and condos, climbed nearly 30% to a 553,000 unit pace.
“The year ended on a high note with solid gains in single-family and multifamily production,” says Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis at the National Association of Home Builders. “And while the December estimates will likely be revised down, the trend moving forward is still positive.”
Facing a lingering housing shortage across the country, the National Association of REALTORS® has long advocated for more new-home construction to accommodate growing demand.
“The solid housing production numbers are in line with strong builder sentiment, supported by a low supply of existing homes, low mortgage rates, and a strong labor market,” says Greg Ugalde, chairman of the NAHB.
Regionally, combined single-family and multifamily housing starts saw the largest uptick in December in the South, up 8.6% annually, and in the Northeast, up 3% annually. Meanwhile, housing starts fell by 4.7% in the West and by 0.8% in the Midwest.
