Last year set quite a few records for the home building industry—just not the kind anyone wants to celebrate. Single-family starts and single-family permits (which totaled 429,000 and 412,000, respectively) both reached new lows, nationally and in each of the country’s four regions in 2011. The total number of units builders completed (582,000) set a new low, as did single-family home completions (444,000) and multifamily unit completions (138,000).
December’s starts and permits didn’t do much to help the annual numbers, as both were down for the month, according to data released today by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Permits were down 0.1% from November to an annual rate of 679,000, but remained 7.8% higher year-over-year. The drop came from multifamily numbers, which declined 3.7%, after posting strong gains in both October and November. Despite the monthly decline, overall multifamily permit numbers remain strong. Single-family permits improved by 1.8% for the month, but were down 0.2% on an annual basis, reporting an annual rate of 444,000.
Regionally, permits were down 6.5% in the Northeast and down 0.6% in the South. The Midwest gained by 5.8%, and the West remained flat.
Starts declined 4.1% on a monthly basis, but remained 24.9% higher year-over-year with an annual rate of 657,000. While single-family starts were up 4.4% from November and up 11.6% annually for an annual rate of 470,000, the improvement wasn’t enough to offset a 20.4% monthly decline in the multifamily sector. However, projects with five units or more, while down 27.8% from November, were up 69.1% from December 2010, hitting an annual rate of 164,000.
Regionally, starts were down 41.2% in the Northeast (after jumping 51.6% in November), down 17.6% in the West, and down 3.0% in the South. The only region reporting a gain was the Midwest, which was up strongly with a 54.8% improvement.
“This year should be a better one for housing than 2011,” wrote Patrick Newport, U.S. economist at IHS Global Insight, in a release regarding the numbers today. “Pent-up demand for housing is building as young adults stay at home, and at some point will spark a revival in housing activity. Initially, the revival will take place in the multifamily segment.” Newport estimates that starts will rise to 726,000 this year, from 607,000 in 2011. Most of that increase is slotted to come from the multifamily sector, which IHS expects to report 273,000 starts in 2012, compared to 177,000 last year. Single-family starts are projected to report a more modest increase, rising to 454,000 this year.
Claire Easley is a senior editor at Builder.