A surge in multifamily production resulted in overall nationwide housing starts rising 11.3 percent to a seasonally adjusted annual rate of 1.23 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Single-family starts dropped 4 percent to a seasonally adjusted annual rate of 795,000 units.
“Despite the slight dip in single-family production, December’s rate is still the fourth highest single-family pace since the Great Recession, and single-family starts also posted solid gains for the year,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “Builders remain confident and we expect further growth in the single-family market in the year ahead.”
“This report represents firm growth for housing in 2016, as single-family starts rose 9 percent and multifamily production was down slightly,” said NAHB Chief Economist Robert Dietz. “We expect that 2017 will be another year of gradual, steady improvement in the housing market. Multifamily starts have been volatile in recent months, but should level off as supply meets demand. Meanwhile, single-family production continues to gain momentum but is limited by supply-side headwinds.”
Multifamily production jumped 57 percent to 431,000 units in December. However, the monthly data for apartment production has exhibited strong volatility since August.
Regionally in December, combined single- and multifamily housing production rose 31.2 percent in the Midwest, 23.5 percent in the West and 18.5 percent in the Northeast. The South posted a loss of 1.4 percent.
Overall permit issuance edged 0.2 percent lower in December to 1.21 million units. Single-family permits rose 4.7 percent to 817,000 units, which was the highest level in 2016. Meanwhile, multifamily permits fell 9 percent to 393,000 units.
Regionally, permits rose 3.3 percent in the West, 2.7 percent in the Northeast and 0.5 percent in the Midwest. The South registered a decline of 2.9 percent.