Despite a slowdown in housing starts caused by a drop in demand from homebuyers, new single-family and apartment housing will increase in 2022. According to Bill McBride in the CalculatedRisk Newsletter, total completions will increase by roughly 17% in 2022 to almost 1.7 million, the highest share since 2006.
Supply chain hurdles have delayed new residential projects for the last several years, but a record number of units are currently under construction, and many are expected to be completed in the coming year and in 2023. With softening demand and increasing supply, experts are anticipating that house price growth and rent growth will slow sharply, providing more opportunities for prospective buyers and renters in the final quarters of the year.
The breakdown of my current estimate:
- Single family completions will increase to around 1.1 million from 970 thousand in 2021.
- Multi-family (including 2 to 4 units) will increase to around 460 thousand from 364 thousand in 2021.
- Manufactured homes will increase to around 120 thousand from 106 thousand last year.