Following October's unanticipated decline in U.S. housing starts, homebuilding saw an upswing in November thanks to substantial gains in multifamily housing construction. Single-family housing starts, however, restrained any further growth, reaching its lowest reading since August 2017.
On Dec. 18, the National Association of Home Builders (NAHB) released its analysis of Census Bureau and U.S. Department of Housing and Urban Development data on single-family and multifamily housing starts for November. NAHB states single-family starts decreased 4.6%, but despite the concerning dip, they were nearly 4% higher today than in the first 11 months of 2017. Compared to November 2017, single-family and apartment construction was up just over 5%.
"Builders are concerned about housing affordability conditions due to the rise in mortgage rates and increasing construction and regulatory costs," NAHB reports. "However, rate declines over recent weeks should provide some support for the market in the coming months. Nonetheless, a 10-year low for housing affordability conditions may put a stop to the two-year trend for rising homeownership, especially for Millennials."
Speeding past single-family housing starts were multifamily projects, which rose 22.4% in November, bringing the seasonally adjusted annual rate to 432,000, noted a Reuters report. More than half of housing starts (54%) were multifamily, NAHB added.
"Multifamily production benefitted from higher mortgage rates and declines for for-sale housing affordability," NAHB states.
—Andrew Michaels, editorial associate