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US housing market continues to decline due to high construction costs and interest rates

US housing market continues to decline due to high construction costs and interest rates

Posted on December 26, 2022   |  

In November, the decline in single-family housing starts continued with a 32% decline in the pace of construction from February.

The high construction costs, elevated interest rates, and fading demand are damaging housing affordability and multifamily permit growth is weakening, with the count of multifamily units under construction reaching a 50-year high,

Overall housing starts fell by 0.5% to a seasonally adjusted annual rate of 1.43 million units in November.

Single-family starts fell by 4.1% to an 828,000 seasonally adjusted annual rate, year-to-date, single-family starts are down 9.4%.

However, the multifamily sector, which contains apartment buildings and condos, grew by 4.9% to an annualized 599,000 pace.

On a regional and year-to-date basis, combined single-family and multifamily starts grew by 1.3% in the Northeast, 0.8% in the Midwest, and 0.6% in the South but fell by 7.0% in the West.

In November, overall permits fell by 11.2% to a 1.34 million unit annualized rate, single-family permits fell by 7.1% to a 781,000 unit rate, and multifamily permits fell by 16.4% to an annualized 561,000 pace, the lowest reading for apartment permits since September 2021.



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