December marks 3rd straight month of growth for US builders
SILVER SPRING, Md. (AP) — Construction of new homes in the U.S. rose for the third consecutive month in December and data released Wednesday suggests that the frantic pace of building will continue this year.
The December increase puts home construction at a seasonally adjusted annual rate of 1.70 million units, the Commerce Department reported Wednesday. In all of 2021, nearly 1.6 million housing units were started a 15.6% increase over 2020.
The December housing data was boosted by multi-unit projects where starts increased by 5%, offsetting a 2.3% decline in single-family starts. However, economists note that multi-family units make up significantly less of the market than single-family homes, and the data can be volatile from month-to-month. Multi-family permits applications rose about 22%.
What has been a strong housing market for years appears to be on the verge of getting even hotter in spite of rising interest rates. Applications for building permits, which can forecast future building activity, rose a whopping 9.1% to a seasonally-adjusted rate of 1.87 million units. That's the strongest month for permits since January of 2021.
“Demand exceeds supply, and builders are working as hard as they can to catch up, a process that was always going to be measured in years, not months, after the massive shift in demand toward single-family homes sparked by the pandemic,” said Stephen Stanley, chief economist for Amherst Pierpont.
Regionally, housing starts in the Northeast and Midwest rose more than 20% and 36% respectively, propping up declines in the South and West.
Lawrence Yun, chief economist for the National Association of Realtors, told The Associated Press recently that with a 3 million to 4 million home shortage and builders able to supply less than 2 million...