Higher materials costs, supply chain issues and a shortage in skilled workers continue to affect new construction.
The latest data from the Census Bureau and Department of Housing and Urban Development reveals building permits, housing starts and housing completions all declined month-over-month in September.
Building permits declined 7.7% from August, and buildings with 5 or more units slipped drastically from 630,000 in August to 498,000 in September, a 21% decline month over month. Despite the large drop off, permits for the sector are up 18% year over year. Meanwhile, two to four units saw a huge bump of 22% from August, and the group is up nearly 9% from September 2020.
Housing starts only dipped 1.6% month over month, yet multifamily starts dropped roughly 5% from the previous month—still nearly 40% higher than September 2020. Housing completions were 4.6% below August’s rate, while completions for 5 units or more sank from 342,000 in August to 280,000 in September, a more than 18% drop. Year over year, completions for 5 units or more bottomed out with a decline of nearly 42%.