Single-family housing starts are lowest in more than two years

The largely downward trend in single-family housing starts in 2022 persisted in September amid rising mortgage rates and sustained home affordability headwinds.

Single-family starts in the US declined 4.7% from August and were down 18.5% year over year to a seasonally adjusted annual rate of 892,000 units, according to the US Census Bureau. Single-family starts have fallen six out of the past seven months.

“The downward trend in single family is happening, just not as quickly as we anticipated,” said Jennifer Coskren, Fastmarkets’ housing economist. “If high rates persist, these single-family numbers should come off further.”

Total housing starts in September slipped 8.1% on a monthly basis to 1.439 million units (SAAR). Total starts were 7.7% below the year-ago level.

Multi-family starts, which have proven resilient in 2022, decreased markedly in September to 547,000 units, but remained 17.6% above the year-ago level.

Starts slipped in three of the four regions from August, only edging up slightly in the West. On an annual basis they fell in all regions except the Northeast, which was up 15.7% year over year on the strength of the multi-family sector.

Housing permits edged up 1.4% month over month in September to 1.564 million units, but were down 3.2% from the year-ago pace. Units under construction, meanwhile, edged up 0.5% to a record 1.710 million units.

The drop in September starts coincides with a persistent decline in the National Association of Home Builders’ monthly builder confidence index, which hit a 10-year low of 38 in October. However, the last time the index dipped to those levels, housing starts were nearly half of their present levels.

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