Record Number of Housing Units Under Construction

by Calculated Risk on 1/19/2023 09:33:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: December Housing Starts: Record Number of Housing Units Under Construction


Possibly Important: Multi-family permits averaged 536,000 SAAR over the last two months after averaging close to 650,000 SAAR over the previous 8 months. This decline in permits is a possible signal that the expected decline in multi-family starts has begun (although permits aren’t a perfect leading indicator for starts).

The fifth graph shows housing starts under construction, Seasonally Adjusted (SA).

Red is single family units. Currently there are 769 thousand single family units (red) under construction (SA). This was up slightly in December compared to November, but 59 thousand below the recent peak in April and May. Single family units under construction have peaked since single family starts are now declining. The reason there are so many homes under construction is probably due to supply constraints.

Housing Units Under ConstructionBlue is for 2+ units. Currently there are 943 thousand multi-family units under construction.  This is the highest level since December 1973! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.

Combined, there are an all-time record 1.712 million units under construction.

The recent weakness has been mostly for single family starts; however, it appears the expected decline in multi-family starts has begun.

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