New Housing Starts: Single Unit v. Multifamily
November 21, 2012    Disclosures    POSTED IN  Economy

New housing starts in the United States peaked during January 2006. During that month the seasonally adjusted annual rate of new home starts was 2,273,000 million units. For comparison, over the past 35 years, the average seasonally adjusted annual rate is 1,429,100 units.

The most recent report from the U.S. Department of Commerce: Census Bureau stated that in October the seasonally adjusted annual rate was 894,000. This is well below the 35 year average, but also a great deal higher than the bottom of 478,000 new starts in April 2009.

The black line in the first chart illustrates the 35 year history of new home starts in the United States. It further breaks down the percentage of housing starts that are single unit structures versus multifamily (two or more unit structures).

From 1990 to 2006 around 80% of all housing starts were single unit structures. Since the housing boom ended though only around 70% of new housing starts are single unit. The only time period over the past six years when that was not true was during the new home buyer tax credit that was ultimately extended to people who had previously purchased a home. This spike is visible from mid 2008 until early 2010 when the credits ended.

 (click on any image for a large size)

Single unit housing starts have risen from the 2009 bottom, but remain well below the 35 year average of 1,069,000 new starts a year.

Multifamily housing starts have also increased from their 2009 lows, but have recovered at much quicker pace. The October 2012 report from the Census Bureaustated that the seasonally adjusted annual rate was 315,000. This is still under the 35 year average of 413,000 units, but is beginning to approach levels seen from 1994 to 2006. The figure is also is still well below the number of new multifamily unit structures built from the late 1970s to the late 1980s.

Data Source: U.S. Department of Commerce: Census Bureau
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