Multifamily Housing Starts Surge in August

High mortgage rates and building production bottlenecks continue to act as a drag on the single-family housing market even as overall housing starts posted a double-digit gain in August due to a surge in multifamily production.

Overall housing starts increased 12.2% to a seasonally adjusted annual rate of 1.58 million units in August off of a downwardly revised July reading, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The August reading of 1.58 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 3.4% to a 935,000 seasonally adjusted annual rate. Year to date, single-family starts are down 4%. The multifamily sector, which includes apartment buildings and condos, increased 28% to an annualized 640,000 pace.

“Single-family production is running at a weakened pace due elevated mortgage rates and high construction costs that have led to a major slowing of the housing market and exacerbated housing affordability,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “The slowdown in the single-family market has been reflected in our builder surveys, which have posted declines every month in 2022.”