U.S. homebuilders are leaning into single-family construction as multifamily development faces a sharp slowdown, signaling a shift in priorities for developers and investors alike. The National Association of Home Builders’ latest report reveals that single-family housing starts jumped 6.4% in November to a seasonally adjusted annual rate of 1.01 million units.
The NAHB found that year-to-date single-family starts are up 7.2%, driven by limited resale inventory that’s forcing more buyers toward new homes. Builders are doubling down on the single-family sector as demand remains firm, with permits for new single-family homes inching up 0.1% to a rate of 972,000 units in November — an 8% increase from the same period last year.
The steady rise in both starts and permits suggests that homebuilders are confident about continued demand, even as higher mortgage rates put pressure on buyers.
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Regionally, the surge in single-family construction is being felt across key Sun Belt markets like Texas, Florida, and North Carolina, where large builders are ramping up production. In the Northeast and Midwest, permits for single-family homes grew 7.3% and 12.4%, respectively, as developers saw renewed interest in suburban living.
On the multifamily side, the picture is far less optimistic. Construction starts plummeted 23.2% in November, underscoring the ongoing retreat from large-scale apartment development. Permits for multifamily projects did increase by 19%, but analysts are cautious, pointing out that high borrowing costs and stricter underwriting are forcing developers to reevaluate deals.
The regional impact of the multifamily slowdown is being felt most acutely in the South and West, where developers have faced higher construction costs and shifting renter demand. The Northeast remains a relative outlier, with a steadier flow of new multifamily permits tied to ongoing demand in urban markets like New York and Boston.
The NAHB said homebuilders are betting big on single-family construction while pulling back on multifamily projects. With the resale market still constrained and affordability pressures mounting, the single-family sector appears poised for steady growth, while multifamily could face a longer path to recovery.
Despite a longer timeline for multifamily units to reach the market, the surge in single-family construction starts signals a clear shift in builder priorities. Demand remains strong, especially in the Sun Belt and suburban regions, suggesting that homebuilders are confident that single-family housing will continue to lead the market in the near term.
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