US housing starts to increase unexpectedly in Multi-family apartment buildings

Construction of new homes in the United States unexpectedly picked up in December at the fastest pace in nine months, led by apartment projects and showing that builders were looking to remedy the situation Shortage of materials and labor. According to government data released on Wednesday, residential housing prices started to rise 1.4% to an annualized 1.70 million, from 1.68 million in November. For all of 2021, 1, 6 million homes were started, up 15.6% from a year earlier and the highest since January last year. Licenses in 2021 increased by 17.2% over the previous year.

Home prices have increased over the past year as potential buyers compete for a very limited number of homes. Builders are rushing to replenish inventory, but supply chain challenges, high raw material prices and a shortage of skilled workers have lengthened construction times and increased backlogs. Without enough finished homes to meet demand, housing affordability is likely to decline further in 2022. Mortgage rates are now at a nearly two-year high, leaving those wanting Being a first time homeowner is even more difficult.

“To the extent that 2022 brings anything new, the question will be whether rising home prices and/or rising mortgage rates will dampen demand enough to balance the market,” said Stephen Stanley, said chief economist at Amherst Pierpont Securities LLC. , said in a note. Started multifamily housing, which tends to be volatile and includes apartment buildings and condominiums, rose 10.7% to 530,000, the fastest pace since February 2020.

According to a government report, the number of single-family homes fell 2.3% in December at an annual rate of 1.17 million units. At the same time, applications to build single-family homes rose 2% to their highest level since May. Overall, new home construction fell by nearly 14% in the West and 1.9% in the South. Housing is starting to increase in the Northeast and Midwest.

Going forward, the omicron variation and corresponding increase in Covid19 cases could exacerbate the problems manufacturers already have. So far, home-building sentiment has remained intact, with a gauge of building confidence falling only slightly in January. The number of single-family homes still under construction has hit its highest level in nearly 15 years, continuing a steady upward trend since June 2020.