Supply-Side Disruptions Push Single-Family Housing Production Down in October
Overall housing starts decreased 0.7% to a seasonally adjusted annual rate of 1.52 million units.
Single-family housing production lagged in October 2021 due to supply chain effects for materials and ongoing access issues for labor and lots. Overall housing starts decreased 0.7% to a seasonally adjusted annual rate of 1.52 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. As a result of continued supply chain challenges, 152,000 single-family units are authorized but have not started construction; this represents an increase of 43.4% from a year ago.
The October reading of 1.52 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 3.9% to a 1.04 million seasonally adjusted annual rate, though they are up 16.7% year-to-date. The multi-family sector, which includes apartment buildings and condos, increased 7.1% in October to an annualized 481,000 pace.
“The rising count of homes permitted but not yet started construction is a stark reminder to policymakers to fix the supply chain so that builders can access a steady source of lumber and other building materials to keep projects moving forward,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla.
According to Robert Dietz, the NAHB’s chief economist, “Single-family permit data has been roughly flat on a seasonally adjusted basis since June due to higher development and construction costs. Demand remains solid but housing affordability is likely to decline in 2022 with rising interest rates.”
Overall permits increased 4% to a 1.65 million unit annualized rate in October. Single-family permits increased 2.7% to a 1.07 million unit rate, while multi-family permits increased 6.6% to an annualized 581,000 pace.
On a regional and year-to-date basis (January through October of 2021 compared to that same timeframe a year ago), combined single- and multi-family starts are 30.2% higher in the Northeast, 10.7% higher in the Midwest, 15.2% higher in the South, and 20.4% higher in the West. Looking at regional permit data, permits are 14.4% higher in the Northeast, 17.2% higher in the Midwest, 20.4% higher in the South, and 23% higher in the West.
For more information, visit www.nahb.org.
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