Multifamily Construction Hits Highest Level Since 1974
When it comes to housing, things are looking a lot like the 1970s again, without the laminated wood paneling and orange shag carpets.
More than 1.48 million housing units — both single-family and multifamily — started construction across the U.S. in November, the highest level since 1973, the financial blog Calculated Risk reported, citing Census Bureau numbers.
Developers started construction on 734,000 multifamily units alone last month, a level not seen since the last full month of Richard Nixon's presidency in July 1974. Homebuilders started 752,000 new houses in November, the most since March 2007.
The South experienced the biggest surge of new housing starts, with 933,000 new homes and apartments breaking ground in November, followed by 412,000 in the West, 204,000 in the Midwest and 130,000 in the Northeast.
But experts say it will likely take some time to get those units available to meet housing demand amid labor and construction material shortages. The coronavirus pandemic slowed construction activity last year and labor shortages and ongoing supply chain issues are delaying some building materials.
The census data is likely to reflect long delays between start and finish on housing units in 2021 after the agency crunches the data. That trend was already seen in 2020, with homebuilders taking an average of nearly seven months to complete a single-family house and more than 15 months to complete buildings with two or more units, according to Calculated Risk.
“It is unlikely this is overbuilding, or that this will impact prices,” author Bill McBride wrote. "For multifamily, construction delays are probably also a factor. The completion of these units should help with rent pressure."