The construction industry ended 2020 on relatively good terms, specifically in regards to housing starts. Despite the hit to the multifamily sector—which decreased 13.6% in December—the National Association of Home Builders (NAHB) reported that gains in single-family housing starts led to an increase in overall housing starts of nearly 6%.
According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts increased 5.8% for a seasonally adjusted annual rate of 1.67 million units, which NAHB states "is the number of housing units builders would begin if development kept this pace for the next 12 months." Last year's total housing starts increased 7% over the prior year thanks to gains of nearly 12% in single-family starts from 2019 to 2020. Meanwhile, multifamily starts decreased 3.3% from 2019 to 2020.
"Builder concerns about a changing regulatory landscape may have triggered many to move up their plans to pull permits and put shovels to the ground," NAHB Chairman Chuck Fowke said in the report. "Our latest builder sentiment survey suggests somewhat softer numbers ahead due to rising building costs and an uncertain regulatory climate."
NAHB Chief Economist Robert Dietz, who also commented in the report, said supply chains will play a significant role in future housing starts due to uncertain "material costs and delivery times, a dearth of buildable lots and regional labor shortages that continue to exacerbate affordability woes."
—Andrew Michaels, editorial associate