By Manuel Gutierrez, Consulting Economist to NKBA
New housing construction continued their downward spiral in December, falling by 1.4 percent to an annual pace of 1.38 million units. This was the fourth straight monthly decline, bringing starts to a level 20 percent lower than at the beginning of 2022.
- Single-family starts rose by 11 percent to an annualized 909,000 units, while multifamily starts were off by 19 percent in the month to 473,000 units, reversing November’s trend.
- The drop in multifamily starts was somewhat surprising, as the segment remained strong throughout most of last year, with a total of 545,000 multifamily housing units started — up 15 percent from 2021.
- Regionally, only the Northeast saw an increase in starts. The spike was small but volatile — up 136 percent — to an annual rate of 212,000 units. This was also the only region with an overall increase in starts for 2022, up 5 percent to 143,000 units.
- Meanwhile, the Midwest saw a 37 percent drop in monthly starts, off 6 percent for the year; the West fell 9 percent for the month and ended 7 percent down for 2022, while the South, the largest region, fell 4 percent in December and was down just 2 percent for the year.
- Looking forward, overall permits also edged down in December, by 1.6 percent to an annualized 1.33 million. December broke another record for houses under construction, up 0.6 percent to 1.7 million homes. Once completed, these homes will put additional downward pressure on housing prices.
