Single-Family Production Growth to Finally Turn the Corner
NAHB said it expects the data has “bottomed out” as of June, the 14th consecutive month of declines.
Single-family construction continued to fall in June, and the National Association of Home Builders (NAHB) said it expects this trend to have bottomed out.
NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala., said, “Single-family production should register growth in the months ahead as the Federal Reserve nears the end of its tightening cycle and mortgage rates begin to stabilize.”
Rising mortgage rates and elevated construction costs have been detrimental to single-family construction in markets nationwide, with the slowdown most noticeable in large metro areas, NAHB said.
NAHB Chief Economist Robert Dietz said in prepared remarks that multifamily and single-family construction has shifted to lower-density markets, especially for apartment construction, “which has seen a segment share decline for large metro areas as development shifts to the suburbs and exurbs.”
Meanwhile, single-family rents grew by 3.3% percent year over year in June, the lowest such gain since autumn 2020, according to CoreLogic, with monthly rent growth nearly equal to the pre-pandemic average of 1% for June.
It marked the 14th consecutive month of downward growth.
Chicago led the nation for year-over-year rent growth in June 2023, at 6.6%, and Las Vegas posted an annual rental cost loss for the fourth straight month, at minus 1.2%, CoreLogic reported.
Molly Boesel, principal economist for CoreLogic, said in a prepared statement, “Annual single-family rent growth has returned to its long-term, pre-pandemic rate, but increases for attached properties were one-and-a-half-times that of detached properties in June. This is historically not the case, as both housing types tend to rise at the same pace.”
The single-family rental market accounts for half of the rental housing stock.