Single‐family housing starts rose 11.6% in February to a rate of 1,129,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
Overall housing starts last month were at a seasonally adjusted annual rate of 1,521,000. This is 10.7% above the revised January estimate of 1,374,000 and is 5.9% above the February 2023 rate of 1,436,000. The February rate for units in buildings with five units or more was 377,000.
“The home building industry has two counteracting forces. Higher interest rates are pushing home prices out of reach for many prospective buyers, but demographic tailwinds are strong; only 4% of millennials never want to own a home one day,” says Zonda chief economist Ali Wolf. “What is happening is that these prospective home buyers are looking at what homes are available and what homes they can afford. In today’s backdrop, many people are finding buying a new home makes the most sense. The latest report on housing starts shows builders are rising to the occasion.”
Privately owned housing units authorized by building permits increased slightly as well. At a seasonally adjusted annual rate of 1,518,000, permits were 1.9% above the revised January rate of 1,489,000 and 2.4% above the February 2023 rate of 1,482,000.
Single‐family authorizations in February were at a rate of 1,031,000, or 1% above the revised January figure of 1,021,000. Authorizations of units in buildings with five units or more were at a rate of 429,000.
Housing completions surged at a seasonally adjusted annual rate of 1,729,000 in February, which is 19.7% above the revised January estimate of 1,445,000 and 9.6% above the February 2023 rate of 1,577,000.
Single‐family housing completions came in at a rate of 1,072,000, or 20.2% above the revised January rate of 892,000. The February rate for units in buildings with five units or more was 644,000.
“Houses are in, and apartments are out. That’s the gist of the February housing starts data,” says Holden Lewis, home expert at NerdWallet. “Home builders began building 35% more single-family houses than the same month a year earlier while commencing construction on 36% fewer apartments. They’re wrapping up an apartment construction boom that was in response to rapidly rising rents during the pandemic. As that boom ends, we’re seeing a surge in construction of single-family houses. Builders are responding to strong demand for affordably priced houses at today’s mortgage rates.”
This story appeared on Builder Online
