There was a jump in housing production at the start of 2018 as the multifamily sector surged
There was a jump in housing production at the start of 2018 as the multifamily sector surged.
Figures from the HUD and the Commerce Department reveal that there was a 9.7% rise in January to a seasonally-adjusted annual rate of 1.33 million units, from an upwardly revised December reading.
Multifamily sector starts soared 23.7% to a SAAR of 449,000 units; single-family homes gained 3.7% to 877,000.
“Demand for owner-occupied housing is rising due to favorable demographic tailwinds and a healthy labor market. Increases in after-tax incomes should help prospective buyers save for a downpayment on a home,” said NAHB Chief Economist Robert Dietz. “As consumers continue to enter the single-family market, we should see builders increase production to meet this demand.”
The Northeast saw a combined 45.5% surge while the West was up 10.7%, and the South gained 9.3%. There was a drop of 10.2% in the Midwest.
Permit issuance was up 7.4% to a SAAR of 1.4 million units. Again, the multifamily sector saw a 26.5% rise while single-family permits slipped 1.7%.
“The growth in production is in line with our reports of solid builder confidence in the housing market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “A pro-business regulatory climate and increasing housing demand are boosting builders’ optimism, even as they continue to face supply-side hurdles such as rising construction material prices and access to lots and labor.”
