Single-Family Construction Reverses Long Trend
A reversal is taking place in the construction pipeline.
Since early 2013, there have been consistently more multifamily units (residences within 2+ unit properties) under construction relative to single-family homes. This was due to multifamily construction recovering more quickly in the years after the Great Recession, as well as years of underbuilding in the single-family sector. However, as of July, there are roughly equal counts of units under construction in the two sectors of the residential market, sparked by an expansion of demand for single-family homes.
In the wake of the Great Recession, there were 289,000 multifamily units in various stages of construction during February 2013. For that month, there were 292,000 single-family homes being built. From that time until June 2021, there were consistently more multifamily units being constructed than single-family homes. The gap was largest in January 2017, when there were 621,000 apartments under construction, compared to 443,000 single-family homes.
The gap has been diminishing since early 2017 and as of June it closed, thanks due to an acceleration of single-family home building during the second half of 2020. As of July, there were 690,000 apartments under construction…and 691,000 single-family homes.
There are a lot dynamics underneath these statistics of course, including longer multifamily build times, lengthening construction times for all kinds of housing, single-family construction cooling in 2021, and a rebound for multifamily development this year. On net, we could see these data series remain close for the next few quarters.
Nonetheless, this stat does reveal the degree of gains for single-family home building at the end of 2020 and the start of 2021, as well the lengthening of cycle construction times in the sector. As a result, in August there were 702,000 single-family homes in the construction pipeline: the most since July 2007.