July 2022 Residential Construction – U.S. Census Bureau

Newly issued permits for residential construction increased by +1.1% from July 2021 but declined -1.3% from June 2022. Permits for single family homes fell -4.3% from last month and have fallen -11.7% from last year. This suggests that the demand for new homes seen during the pandemic is subsiding. Additionally we see a +2.5% increase in permits for multi-family housing from last month and a +26.2% increase from last year. This signals investors are continuing to return to the market after largely leaving during the pandemic.

Of those units authorized, those not started increased by +5% from last month and +18.4% from last year. This breaks down into a 2.1% increase in Single Family Homes authorized but not started from June 2022, but a -0.7% decrease from July 2021. On the other hand, multi-family units have seen an 8.9% increase in units authorized but not starting from June 2022 and a whopping +47% increase from July 2021. This suggests that while investors are interested in returning to the market, there is still uncertainty regarding material and labor conditions. 

Turning to units started we see a -9.6% decrease in total from last month and a -8.1% decrease from last year. In the single family market the decreases are higher, -10.1% from last month and -18.5% from last year. Month/Month the multi-family market is very similar to the single family market. In the year/year picture we see multi-family units being started at higher rates than this time last year. Confirming our hypothesis that investors are returning to the market. 

Of total houses under construction at the end of the period we see marginal change from last month, -0.1%. We do see a very large increase from last year, up 21.1%. The single-family and multi-family markets reflect similar observations. Firstly, a decrease of -1.2% in the Single-family market from last month, and a 17.4% increase from last year. Secondly, in the multi-family market, we see a +0.8% increase from last month and a +24.8% increase from last year. 

Lastly, we look at housing units completed in July 2022 and find that there was a 1.1% increase in total units completed from June 2022 and a 3.5% increase in units completed from July 2021. Single family homes saw a -0.8% decrease in completions from last month, but a 7% increase from last year. We take this to confirm our hypothesis that the demand for homes is subsiding. In the multi-family market we notice a +6.7% increase in completions from last month but a decrease in completions from last year. Over the pandemic there was a period where investors who were already under development needed to finish construction while investors not under development began to pull out. This monthly increase and yearly decrease may represent this happening.