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Single-family new-home construction is up 17% compared to a year ago and up by 23% compared to 2019, prior to the pandemic, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported Tuesday.
“More housing inventory will therefore steadily emerge,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “Newly constructed homes are generally larger in size and more expensive than existing homes, and not geared toward first-time buyers. Nonetheless, more supply of these homes allows trade-up buyers to make their move and in the process place their previous homes on the market.”
In September, new-home construction—which includes single-family and multifamily housing production—dropped slightly by 1.6% compared to August, but the higher percentages annually and increase in single-family construction have builders hopeful that they’ll be able to meet more of buyer demand in the coming months.
“Single-family construction continued along recent, more sustainable trends in September,” says Chuck Fowke, chairman of the National Association of Home Builders. “Lumber prices have moved off recent lows, but the cost and availability of many building materials continues to be a challenge for a market that still lacks inventory.”
The number of single-family homes under construction is 712,000, nearly 31% higher than a year ago.
Multifamily construction is also up nearly 6% year over year for the percentage of apartments under construction, says Robert Dietz, chief economist at the National Association of Home Builders.
On a regional basis from January through September this year, combined single-family and multifamily housing starts were highest in the Northeast, up 28.9%, followed by a 22.6% increase in the West, an 18.6% increase in the South, and a 12.1% increase in the Midwest.
Housing permits, a gauge of future construction, are also up. Permits for single-family and multifamily units on a year-to-date basis are 25% higher in the West, 22.9% higher in the South, 19.9% higher in the Midwest, and 19.6% higher in the Northeast.