October 2021 New Residential Construction – Census Bureau

In October 2021 we saw residential construction permits rise 4.0% from September of 2021 and up 3.4% from October of 2020. Permits for single family homes are up 2.7% for the month but down -6.3% since September of 2020. This may suggest that the single family residential construction market is beginning to cool down. Contrasting this slow down in single family homes is a large uptick in the amount of permits for multi-family developments. New builds with 5+ units are up 6.5% since September 2021 and 34% since October. 

Units authotrized but not started are up 4.7% from last month and 44.8% from last year. Families and investors are showing a lot of optimism toward the future as many projects that were placed on hold in 2020 were restarted in 2021. Total number of starts however have fallen marginally from last month but ticked up slightly from last year. While permits can be issued in any magnitude, the availability of labor determines how many units can be started and completed at a time. 1.6% more units remain under construction this month than last month, and 18.2% more units are under construction now than at this time last year. This rise in units under construction is due to longer project times caused by supply constraints, labor shortages, and other new regulatory requirements.

Units completed for October 2021 remain unchanged from September 2021, we see a small decrease in single family homes in favor of multi-family developments with 5+ units. We see a large decrease in construction completions for multi-family developments from this time last year. These large projects can take multiple years to complete and we believe investors rushed to finish projects under construction while holding off on new projects. These decisions are now being seen in a lower number of completions.