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The cooling housing market has led the U.S. to a first-ever milestone indicative of where the real estate market is today.
In the fourth quarter of last year, the number of housing units for rent that started construction outpaced the number of for-sale single-family housing starts for the first time ever, according to the U.S. Census Bureau's latest housing report.
Single-family houses intended for sale nationwide totaled 132,000 starts between September and December, down 34% year-over-year. By contrast, starts on residential units built for rent were up 15% in the fourth quarter of last year compared with 2021, for 133,000 new unit starts.
That is the first time since the Census Bureau began tracking housing by purpose in 1974 that more for-rent units were launched than single-family homes.
The bureau doesn't compare starts on single-family houses for sale with single-family houses for rent. Rather, it compares starts on single-family houses for sale with starts on developments of two or more units that happen to be for rent.
Most single-family houses being built are still detached, with 156,000 detached starts in Q4, versus 37,000 attached. Still, the percentage of attached housing is up, totaling 19.1% in the fourth quarter of 2022 compared with 15% a year earlier.
Average home size is also dropping. In Q4 2022, the average single-family house start totaled 2,565 SF. At the end of last year, the average was 2,472 SF. For multifamily developers, average unit size in the fourth quarter was 1,042 SF, down from 1,055 SF the year before and the smallest on record.
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