by Calculated Risk on 3/17/2022 10:03:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: February Housing Starts: Most Housing Units Under Construction Since 1973

Excerpt:

The fourth graph shows housing starts under construction, Seasonally Adjusted (SA).

Red is single family units. Currently there are 799 thousand single family units under construction (SA). This is the highest level since December 2006.

For single family, many of these homes are already sold (Census counts sales when contract is signed). The reason there are so many homes is probably due to construction delays. Since many of these are already sold, it is unlikely this is “overbuilding”, or that this will impact prices (although the buyers will be moving out of their current home or apartment once these homes are completed).

  Blue is for 2+ units. Currently there are 784 thousand multi-family units under construction.  This is the highest level since June 1974! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.

Combined, there are 1.583 million units under construction. This is the most since August 1973.

Length of Time from Authorization to Start and from Start to Completion

Census released the annual data on the length of time from start to completion, and this showed construction delays in 2021.

In 2021, it took an average of 7.2 months from start to completion for single family homes, up from 6.8 months in 2020. For multi-family, it took 15.4 months for buildings with 2 or more units in 2021, the same as in 2020 (the long delays will likely show up in the 2022 data since it takes over a year to complete).

From Authorization to Start, it took 1.3 months in 2021 for single family homes, up from 1.0 months in 2020, and it took 2.1 months in 2021 for multi-family, up from 2.0 months.

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