A photo of the interior of a building under construction, with unpainted drywall and large windows.

Single-family housing starts dropped in October as supply chain woes over construction materials and labor shortages continued to hamper the building industry. Single-family housing starts fell nearly 4% last month to a seasonally adjusted annual rate of 1.04 million, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported Wednesday.

Still, single-family housing starts are faring better in the long run, up 16.7% year-to-date.

“The rising count of homes permitted but that have not yet started construction is a stark reminder to policymakers to fix the supply chain so that builders can access a steady source of lumber and other building materials to keep projects moving forward,” says Chuck Fowke, chairman of the National Association of Home Builders.

Builders blame supply chain effects as the reason 152,000 single-family homes that have been authorized but have not yet started, up 43.4% from a year ago.A record number of home builders are reporting a shortage of workers, including carpenters, painters, electricians, and other trades.

“Single-family permit data has been roughly flat on a seasonally adjusted basis since June due to higher development and construction costs,” says Robert Dietz, the NAHB’s chief economist. “Demand remains solid but housing affordability is likely to decline in 2022 with rising interest rates.”

Overall housing starts, which include both single-family homes and multifamily construction, decreased 0.7% in October to a seasonally adjusted annual rate of 1.52 million units. The multifamily sector, which includes apartment buildings and condos, rose 7.1% in October, reaching an annualized pace of 481,000 units.

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