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January Housing Starts: Most Housing Units Under Construction Since 1973

by Calculated Risk on 2/17/2022 01:02:00 PM

Today, in the CalculatedRisk Real Estate Newsletter: January Housing Starts: Most Housing Units Under Construction Since 1973

Excerpt:

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

Red is single family units. Currently there are 785 thousand single family units under construction (SA). This is the highest level since December 2006.

For single family, many of these homes are already sold (Census counts sales when contract is signed). The reason there are so many homes is probably due to construction delays. Since many of these are already sold, it is unlikely this is “overbuilding”, or that this will impact prices (although the buyers will be moving out of their current home or apartment once these homes are completed).

Blue is for 2+ units. Currently there are 758 thousand multi-family units under construction. This is the highest level since July 1974! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.

Census will release data in March (part of February survey) on the length of time from start to completion, and that will probably show long delays in 2021. In 2020, it took an average of 6.8 months from start to completion for single family homes, and 15.4 months for buildings with 2 or more units.

Combined, there are 1.543 million units under construction. This is the most since September 1973.

There is much more in the post. You can subscribe at https://calculatedrisk.substack.com/ (Most content is available for free, so please subscribe).

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