Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Housing Starts, February 16, 2024

Housing starts collapsed in January. More snow than usual fell across parts of the country, but the seasonally adjusted data implies a continuing housing shortage ahead. Multifamily construction fell 37% from a year ago and has been one of the lowest monthly activities over the past decade. Rising apartment vacancy is not due to fewer renters but rather due to the oversupply of construction in the past three years. Developers are, therefore, pulling back, at least temporarily. Single-family home construction also fell by 5% from the prior month but remained above the key 1-million-unit mark. Ideally, single-family housing starts would be at 1.2 million, which would measurably help to relieve the housing shortage.

America greatly underproduced housing in the decade before COVID. That shortage is still lingering in the marketplace. The way to address the shortage is to incentivize construction. However, some localities are choosing the wrong policies, such as rent control, NIMBYism, and raising impact fees, which will make the shortage worst and raise housing costs in the long run.

Line graph: Monthly Single-family Housing Starts Pre- and Post-Covid, January 2017 to January 2024
Bar graph: Annual Single-family Housing Starts, 1981 to 2023
Line graph: Monthly Multifamily Housing Starts in January Pre- and Post-Covid, 2017 to 2024
Bar graph: Annual Multifamily Housing Starts Cyclical Highs, 1981 to 2023
Bar graph: Private Sector Data on Apartment Vacancy Rate, 2017 to 2024
Line graph: Rents Strengthening or Softening, Q1 2022 to Q4 2023