By Manuel Gutierrez, Consulting Economist to NKBA
As expected, housing starts fell in January to an annual rate of 1.3 million units, off 4.5 percent from December and 21 percent YOY. Single-family and multifamily houses each fell by similar percentages last month: Single-family starts fell 4.3 percent to 841,000 houses, and multifamily dropped by 4.9 percent, to 468,000 units.
- In January 2022, single-family starts were running at an annualized 1.67 million units — 27 percent higher than this year. Multifamily starts, however, are running 8 percent below last year’s rate of 509,000 units.
- Despite the drop in starts and a dimmer overall economic outlook, housing permits remained virtually flat in January at 1.34 million. This reflects a 1.8 percent drop in single-family permits and a 2.5 percent hike for multifamily units.
- Regionally, housing starts fell in the Northeast (down 42 percent down to an annualized 119,000 units) and the Midwest (off 26 percent, to a rate of 123,000 units). The South rose 7.3 percent to 760,000 units, and the West grew 5.5 percent to 307,000 units.
- The number of housing units under construction edged down to 1.7 million housing units, just 11,000 units (4.8 percent) below the peak reached in October 2022. Single-family homes being built have steadily declined, to 752,000, from 828,000 last April. Multifamily units under construction, however, rose by 24 percent to 948,000 units.
- The size of new houses is also shrinking slightly. The median size of new single-family houses built in the fourth quarter was 2,203 square feet, which is 132 square feet, or 6 percent, smaller YOY. The median size of a single-family house today is 316 square feet smaller than in 2015.
- Multifamily units are also getting smaller, although the current size of 1,001 square feet is just 14 square feet smaller than in the fourth quarter of 2021. The size of today’s typical multifamily unit has shrunk by 229 square feet from in mid-2006, when units averaged 1,230 square feet.
