Single-family Construction Rises

By:: Peter King | January 20, 2012

Single-family home construction rose again in December, with both construction starts and building permits increasing for the fourth consecutive month.

The Commerce Department reported today that construction starts on single-family homes were at an annual rate of 470,000 units in December, a 4.4 percent increase over November’s level. On an annual basis, the figure represents an 11.6 percent gain over the December 2010 level.

Building permits for single-family homes were up 1.8 percent over November’s level, to an annual rate of 444,000 units. That represents a slight decline on an annual basis, down 0.2 percent from December 2010.

Apartment construction fluctuates

Overall residential construction figures were down for the month, owing to a drop in the volatile multifamily housing sector, which often sees large fluctuations from month to month. Construction of residential properties of five or more units, such as apartment buildings, has been increasing strongly over the past year due to an increased demand for rental properties as many consumers are unable or unwilling to purchase homes in the current economy.

Construction starts on multiunit residential properties was at an annual rate of 164,000 units in December, a 27.8 percent drop from November but still representing a 69.7 percent increase over 12 months before. Building permits issued for residential properties of five or more units were at an annual rate of 209,000 units in December, down 6.3 percent from November’s level but representing a 30.6 percent increase over December 2010.

Despite the recent increases, single-family home construction, which still makes up the vast majority of residential construction, remains extremely low by historical standards, currently running at less than one-half to one-third of typical levels of the past 40 years.

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