​Expect More New Housing in 2024 Than in 2023

Housing advocacy groups, governments, and the homebuilding industry have been calling for more housing in the US. Based on new numbers, they won’t get as much as they’d like this year, but 2024 is looking promising.

Slippage in multifamily development in December offset the double-digit percentage gain in single-family homes, according to the US Department of Housing and Urban Development and the US Census Bureau, but “production is running well below a rate of 1 million units annually, indicating ongoing weakness in the housing market as high construction costs and elevated interest rates continue to present affordability challenges, according to National Association of Home Builders (NAHB).

Overall housing starts decreased by 1.4% to a seasonally adjusted annual rate of 1.38 million units in December.

Explained further by NAHB, the December reading of 1.38 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 11.3% to a 909,000 seasonally adjusted annual rate but are down 25% compared to December 2021. The multifamily sector, which includes apartment buildings and condos, decreased by 19% to a 473,000 pace.

Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga., said in prepared remarks, “Even though single-family starts are up on a monthly basis, permits indicate that the housing market will slow down further in 2023. We expect a sustainable decline for mortgage rates in the second half of this year, which should lead to a housing recovery in 2024.”

NAHB’s assistant vice president for forecasting and analysis, Danushka Nanayakkara-Skillington, said in prepared remarks that the decline in single-family permits indicates that builders are slowing construction activity as interest rates have spiked in recent months.