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Housing Starts End 2024 on an Up Note

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Fueled by solid demand, single-family construction moved higher in December despite several headwinds facing the industry, including high mortgage rates, elevated financing costs for builders and a lack of buildable lots.

Overall housing starts increased 15.8% in December to a seasonally adjusted annual rate of 1.50 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest rate since February 2024.

The December reading of 1.50 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 3.3% to a 1.05 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 61.5%for December to a 449,000 pace.

Total housing starts for 2024 were 1.36 million, a 3.9% decline from the 1.42 million total from 2023. Single-family starts in 2024 totaled 1.01 million, up 6.5% from the previous year. NAHB is forecasting a slight gain for single-family home building in 2025 because of a persistent housing shortage and ongoing solid economic conditions.

Multifamily starts ended the year down 25% from 2023. In December, and on a three-month moving average basis, there were 1.7 apartments completing construction for every one apartment starting construction. Multifamily construction will stabilize later in 2025 as more deals pencil out, with the industry supported by a low national unemployment rate.

Single-family completions ended 2024 up 2.2%.  Multifamily completions ended 2024 up 35%.  Within multifamily, the missing middle (two- to four-unit completions) were up 42.5%, for a total of 16,600 duplexes through quadplexes. Like ongoing strength for townhouse construction, this market data indicates that with zoning reform more medium density housing can be built in markets where such demand exists.

On a regional and for 2024 year, combined single-family and multifamily starts were 9.1% higher in the Northeast, 0.1% lower in the Midwest, 5.2% lower in the South and 7.7% lower in the West.

Overall permits decreased 0.7% a 1.48 million unit annualized rate in December and were down 3.1% compared to December 2023. Single-family permits increased 1.6% to a 992,000 unit rate but were down 2.5% in December compared to the previous year. Multifamily permits decreased 5.0% to a 491,000 pace.

Looking at regional permit data for 2024 permits were 1.5% higher in the Northeast, 3.5% higher in the Midwest, 3.1% lower in the South and 6.6% lower in the West.

Total permits for 2024 were 1.47 million, a 2.6% decline from the 1.51 million total from 2023. Single-family permits in 2024 totaled 981,000 up 6.6% from the previous year, a positive sign for 2025.

The number of single-family homes under construction was down 5.3% from a year ago, at 641,000 homes. The number of apartments under construction was down 21% from a year ago, at 790,000. The count of apartments under construction peaked in July 2023 at 1.02 million and has been trending lower since that time.

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Housing Inflation Moderates Amid Higher Energy Costs

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Inflation edged up to a five-month high in December as energy prices surged, accounting for more than 40% of the monthly headline increase. Inflation ended 2024 at a 2.9% rate, down from 3.4% a year ago, although the last mile to the Fed’s 2% target continues to be challenging. While core inflation remained stubborn due to elevated shelter and other service costs, housing costs showed signs of cooling – the year-over-year change in the shelter index remained below 5% for a fourth straight month and posted its lowest annual gain since January 2022, suggesting a continued moderation in housing inflation.

While the Fed’s interest rate cuts could help ease some pressure on the housing market, its ability to address rising housing costs is limited, as these increases are driven by a lack of affordable supply and increasing development costs. In fact, tight monetary policy hurts housing supply because it increases the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise at an elevated pace despite Fed policy tightening. Additional housing supply is the primary solution to tame housing inflation.

Furthermore, the election result has put inflation back in the spotlight and added additional   risks to the economic outlook. Proposed tax cuts and tariffs could increase inflationary pressures, suggesting a more gradual easing cycle with a slightly higher terminal federal funds rate. However, economic growth could also be higher with lower regulatory burdens. Given the housing market’s sensitivity to interest rates, a higher inflation path could extend the affordability crisis and constrain housing supply as builders continue to grapple with lingering supply chain challenges. During the past twelve months, on a non-seasonally adjusted basis, the Consumer Price Index rose by 2.9% in December, according to the Bureau of Labor Statistics’ report. This followed a 2.7% year-over-year increase in November. Excluding the volatile food and energy components, the “core” CPI increased by 3.2% over the past twelve months, after holding steady at 3.3% for three months. The component index of food rose by 2.5%, while the energy component index fell by 0.5%.

On a monthly basis, the CPI rose by 0.4% in December on a seasonally adjusted basis, after a 0.3% increase in November. The “core” CPI increased by 0.2% in December, after rising  0.3% for three consecutive months.

The price index for a broad set of energy sources rose by 2.6% in December, with increases across all categories including gasoline (+4.4%), fuel oil (+4.4%), natural gas (+2.4%) and electricity (+0.3%). Meanwhile, the food index rose 0.3%, after a 0.4% increase in November. Both indexes for food away from home and food at home increased by 0.3%.

The index for shelter (+0.3%) was the largest contributor to the monthly increase in all items index, accounting for nearly 37% of the total increase. Other top contributors that rose in December include indexes for airline fares (+3.9%), used cars and trucks, (+1.2%) and new vehicles (+0.5%). Meanwhile, the index for personal care (-0.2%) was among the few major indexes that decreased over the month. The index for shelter makes up more than 40% of the “core” CPI, rose by 0.3% in December, the same increase last month. Both indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) increased by 0.3% over the month. Despite the moderation, shelter costs remained the largest contributors to headline inflation.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster than overall inflation, the real rent index rises and vice versa. The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). In December, the Real Rent Index rose by 0.1%. Over the twelve months of 2024, the monthly growth rate of the Real Rent Index averaged 0.1%, slower than the average of 0.2% in 2023.

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Top Posts – Considering Housing Inventory: Why Both New and Existing Supply Matters

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With the end of 2024 approaching, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In June, Chief Economist Rob Dietz highlighted the importance of both new and existing home inventory in understanding housing market dynamics, emphasizing that while rising inventory may signal price moderation, the current low levels of resale homes still support home construction and price growth.

Total (new and existing) home inventory is an important measure for gauging and forecasting home prices and home construction impacts. The intuition is clear: more inventory yields weaker or declining home price growth and home building activity. Lean inventory levels lead to price growth and gains for home building.

The metric “months’ supply” is a common measure of current market inventory. For both new and existing home markets, months’ supply converts inventory from a count of homes into a measure of how many months it would take for that count of home inventory to be sold at the current monthly sales pace.

Housing economists typically advise that a balanced market is a five- to six-months’ supply. Larger inventory levels than this benchmark risk producing deteriorating conditions for price growth and building activity.

In the Census May 2024 newly-built home sales data, the current months’ supply of inventory is 9.3. Some analysts have noted that, given the five- to six-month benchmark, that this means the building market for single-family homes is possibly oversupplied, implying declines for construction and prices lie ahead.

However, this narrow reading of the industry misses the mark. First, it is worth noting that new home inventory consists of homes completed and ready to occupy, homes currently under construction and homes that have not begun construction. That is, new home inventory is a measure of homes available for sale, rather than homes ready to occupy. In fact, just 21% of new home inventory in May consisted of standing inventory or homes that have completed construction (99,000 homes).

More fundamentally, an otherwise elevated level of new home months’ supply is justified in current conditions because the inventory of resale homes continues to be low. Indeed, according to NAR data, the current months’ supply of single-family homes is just 3.6, well below the five- to six-month threshold. It is this lack of inventory that has produced ongoing price increases despite significantly higher interest rates over the last two years.

Taken together, new and existing single-family home inventory, the current months’ supply of both markets is just 4.4, as estimated for this analysis. This is admittedly higher than the 3.6 reading, using this approach, from a year ago, but it still qualifies as low. See the following graph for total months’ supply going back to the early 1980s using data from the NAR existing home sales series and the Census new home sales data, as calculated by NAHB.

Yes, inventory is rising and will continue to rise, particularly as the mortgage rate lock-in effect diminishes in the quarters ahead. But current inventory levels continue to support, on a national basis, new construction and some price growth, per this current reading of total months’ supply.

Further, the housing deficit (NAHB estimates about 1.5 million homes), which was produced by a decade of underbuilding due to a perfect storm of supply-side challenges, has generated a separation in the normally co-linear measures of new and existing home months’ supply. This separation became particularly pronounced during the COVID and post-COVID period of the housing market. June 2022 recorded the largest ever lead of new home months’ supply (9.9) over existing single-family home months’ supply (2.9). This separation makes it clear that an evaluation of current market inventory cannot simply examine either the existing or the new home inventory in isolation.

With the current total months’ supply at 4.4, what does this mean for the market, particularly with respect to pricing and construction trends? To examine this question, I calculated the total months’ supply reported on the first graph in this post. I then examined price movements and single-family construction starts data with respect to current total months’ supply. The results are broadly consistent with the existing rules of thumb regarding market conditions.

The horizontal axis plots total months’ supply for monthly data going back to the start of 1988 (the starting point of the price data used for this analysis). The vertical axis records the corresponding year-over-year home price growth for the same month as measured by the Case-Shiller Home Price Index. The trend line is estimated using a simple linear regression. The statistical correlation indicates that home price growth, on average, turns negative when inventory reaches an 8-months’ total supply (on the graph, the trend line intersects the horizontal axis, measuring zero percent price growth, at 8 months’ supply).

To be clear, this does not mean that prices will not fall until months’ supply exceeds eight. For example, 24% of the data registering 6.5 to 7.5 months’ supply recorded home price declines. For the data in the range of 7.5 months’ supply to less than 8 months’ supply, this share increased to 36%. Overall, for months with less than an eight months’ supply, it was less likely than not to see home price declines, but it did happen in certain market conditions.

And to be complete, home prices did not always fall when total inventory was greater than an eight months’ supply. For example, for months with a months’ supply measure of 8.5 to 9.5, homes prices increased 36% of the time.

Taken together, these general trends indicate that a months’ supply of less than eight has historically been positive for nominal home price growth. That’s where market conditions are today.

What about impacts for single-family home building? The data are little less clear (as seen by smaller R-squared measures on the trends), but this should not be a surprise. Home building is a function of both demand-side housing factors, like mortgage interest rates, as well as volatile supply-side variables like the cost and availability of labor, lots, lending, lumber/materials, and legal/regulatory policies and fees. Nonetheless, using Census housing starts data and the same total months’ supply metric, a trend is apparent, and it is one that matches up well with existing rules of thumb.

As the chart above indicates, a simple linear trend of monthly data going back to mid-1982 (the limit of the supply data) indicates that at roughly 6-months’ total home inventory, single-family home building reaches a zero percent year-over year growth rate. As before, and as seen in the graph above, the correlation is not absolute.

For example, for otherwise tight 4.5 months’ to 5.5 months’ new and existing home supply, single-family home building did contract 27% of the time. On the other hand, for markets with more inventory than the benchmark (6.5 to 7.5 months’ supply), home building expanded 30% of the measured months. As with home prices, the trend is not absolute, but the six-months’ supply benchmark is a useful rule of thumb for examining whether builders will reach a neutral stance for expanding home construction activity.

It is worth noting that home builder production can occur with a lag with respect to inventory conditions. For example, the time between permit approval and the start of construction was approximately 1.3 months in 2022 (2023 data will be available in the coming months). And single-family construction time averaged 8.3 months, per NAHB estimates using Census data. Mindful of these lags, I examined the impact of total months’ supply on single-family starts with both a three-month and six-month lag. In both analyses, the 6-months’ benchmark was again validated. For a relatively straightforward analytical approach, this represents a fairly robust result, albeit one with a notable amount of statistical noise due to supply-side factors associated with construction inputs and constraints.

The data thus show that current market conditions are unusual, with a large gap between new and existing single-family months’ supply. Analyses that rely on just one of these measures will be misleading. A total months’ supply measure that measures both new and existing inventory is required to gauge the status of inventory conditions and possible impacts on home prices and home building.

Furthermore, the historical correlations suggest that home builders will significantly slow home building activity at a 6-months’ supply of total housing inventory. And price declines become more likely than not at an 8-months’ supply.  

In the meantime, builders, housing stakeholders, and analysts should view the current nine months’ supply for new homes within its proper context. This will be particularly important as resale levels continue to rise, with additional gains expected to occur as the mortgage-rate lock-in effect diminishes in the quarters ahead. However, keep in mind, lower mortgage rates will also unambiguously improve housing affordability conditions and price prospective home buyers back in the market, thus putting downward pressure on the months’ supply metric by increasing sales rates.

With each Census new home sales report, NAHB will continue to estimate and watch the total months’ supply measure. But given this analysis, at 4.4 total months’ supply, inventory levels have increased but remain low and supportive of limited gains for home building and upward pressure on nominal home prices.

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Top Posts – The Age of the U.S. Housing Stock

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With the end of 2024 approaching, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In February, Na Zhao shared the latest data on ages of homeowners as well as when their homes were built. 

The median age of owner-occupied homes is 40 years old, according to the latest data from the 2022 American Community Survey[1]. The U.S. owner-occupied housing stock is aging rapidly especially after the Great Recession, as the residential construction continues to fall behind in the number of new homes built. New home construction faces headwinds such as rising material costs, labor shortage, and elevated interest rates nowadays.

With a lack of sufficient supply of new construction, the aging housing stock signals a growing remodeling market, as old structures need to add new amenities or repair/replace old components. Rising home prices also encourage homeowners to spend more on home improvement. Over the long run, the aging of the housing stock implies that remodeling may grow faster than new construction.

New construction added nearly 1.7 million units to the national stock from 2020  to 2022, accounting for only 2% of owner-occupied housing stock in 2022. Relatively newer owner-occupied homes built between 2010 and 2019 took up around 9%.  Owner-occupied homes constructed between 2000 and 2009 make up 15% of the housing stock. The majority, or around 60%, of the owner-occupied homes were built before 1980, with around 35% built before 1970.

Due to modest supply of housing construction, the share of new construction built within the past 12 years declined greatly, from 17% in 2012 to only 11% in 2022. Meanwhile, the share of housing stock that is at least 53 years old experienced a significant increase over the 10 years ago. The share in 2022 was 35% compared to 29% in 2012.

[1] : Census Bureau did not release the standard 2020 1-year American Community Survey (ACS) due to the data collection disruptions experienced during the COVID-19 pandemic. The data quality issues for some topics remain in the experimental estimates of the 2020 data. To be cautious, the 2020 experimental data is not included in the analysis.

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Inflation Remains Sticky Despite Easing Housing Costs

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Inflation picked up to 2.7% in November, while matching expectations, the last mile to the Fed’s 2% target proves to be the most challenging. Shelter costs continued to be the main driver of inflation, contributing nearly 40% of the monthly increase. However, the year-over-year change in the shelter index remained below 5% for a third straight month and posted its lowest annual gain since February 2022, suggesting moderation in housing inflation.

While the Fed’s interest rate cuts could help ease some pressure on the housing market, its ability to address rising housing costs is limited, as these increases are driven by a lack of affordable supply and increasing development costs. In fact, tight monetary policy hurts housing supply because it increases the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise at an elevated pace despite Fed policy tightening. Additional housing supply is the primary solution to tame housing inflation.

Furthermore, the election result has put inflation back in the spotlight and added some downside risks to the economic outlook. Proposed tax cuts and tariffs could increase inflationary pressures, suggesting a more gradual easing cycle with a slightly higher terminal federal funds rate. Given the housing market’s sensitivity to interest rates, this could extend affordability crisis and constrain housing supply as builders continue to grapple with lingering supply chain challenges.

During the past twelve months, on a non-seasonally adjusted basis, the Consumer Price Index (CPI) rose by 2.7% in November, according to the Bureau of Labor Statistics’ report. This followed a 2.6% year-over-year increase in October. Excluding the volatile food and energy components, the “core” CPI increased by 3.3% over the past twelve months, the same increase as in the previous two months. The component index of food rose by 2.4%, while the energy component index fell by 3.2%.

On a monthly basis, the CPI rose by 0.3% in November on a seasonally adjusted basis, after a 0.2% increase in October. The “core” CPI increased by 0.3% in November, the same increase as in the past three months.

The price index for a broad set of energy sources rose by 0.2% in November, with declines in electricity (-0.4%) offset by increases in gasoline (+0.6%), natural gas (+1.0%) and fuel oil (+0.6%). Meanwhile, the food index rose 0.4%, after a 0.2% increase in October. The index for food away from home increased by 0.3% and the index for food at home rose by 0.5%.

The index for shelter (+0.3%) was the largest contributor to the monthly increase in all items index, accounting for nearly 40% of the total increase. Other top contributors that rose in November include indexes for used cars and trucks (+2.0%), household furnishings and operations (+0.6%), medical care (+0.3%) and new vehicles (+0.6%). Meanwhile, the index for communication (-1.0%) was among the few major indexes that decreased over the month.

The index for shelter makes up more than 40% of the “core” CPI, rose by 0.3% in November after a 0.4% in October. Both indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) increased by 0.2% over the month. For the rent index, it was the smallest monthly increase since April 2021 and July 2021. Despite the moderation, shelter costs remained the largest contributors to headline inflation. 

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster than overall inflation, the real rent index rises and vice versa. The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

In November, the Real Rent Index fell by 0.1%, marking its first negative reading since December 2021. Over the first eleven months of 2024, the monthly growth rate of the Real Rent Index averaged 0.1%, slower than the average of 0.2% in 2023.

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Higher Mortgage Interest Rates Slow Housing Production in October

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Housing starts edged lower last month as average monthly mortgage rates increased a quarter-point from 6.18% to 6.43% between September and October, according to Freddie Mac.

Overall housing starts decreased 3.1% in October to a seasonally adjusted annual rate of 1.31 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The October reading of 1.31 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 6.9% to a 970,000 seasonally adjusted annual rate. On a year-to-date basis, single-family construction is up 9.3%. The volatile multifamily sector, which includes apartment buildings and condos, increased 9.6% to an annualized 341,000 pace but are down 29.3% on a year-to-date basis.

Although housing starts declined in October, builder sentiment improved for a third straight month in November as builders anticipate an improved regulatory environment in 2025 that will allow the industry to increase housing supply. Further interest rate cuts from the Federal Reserve through 2025 should result in lower interest rates for construction and development loans, helping to lead to a stabilization for apartment construction and expansion for single-family home building.

While multifamily starts increased in October, the number of apartments under construction is down to 821,000, the lowest count since March 2022 and down 18.9% from a year ago. In October, there were 1.8 apartments that completed construction for every one apartment that started construction. The three-month moving average reached a ratio of 2 in October.

There were 644,000 single-family homes under construction in October, down 3.6% from a year ago and down 22% from the peak count in the Spring of 2022.

On a regional and year-to-date basis, combined single-family and multifamily starts are 10.4% higher in the Northeast, 1.7% lower in the Midwest, 5.0% lower in the South due to hurricane effects, and 4.4% lower in the West.

Overall permits decreased 0.6% to a 1.42 million unit annualized rate in October. Single-family permits increased 0.5% to a 968,000 unit rate and are up 9.4% on a year-to-date basis. Multifamily permits decreased 3.0% to an annualized 448,000 pace.

Looking at regional data on a year-to-date basis, permits are 0.9% higher in the Northeast, 3.9% higher in the Midwest, 2.4% lower in the South and 4.8% lower in the West.

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Housing Costs Continue to Drive Inflation

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Inflation picked up again in October, showing the last mile to the 2% target will be the hardest. Shelter costs remained the main driver of inflation, accounting for over 65% of the 12-month increase in the all items less food and energy index. However, the year-over-year change in the shelter index has been below 5% for the second consecutive month, signaling some moderation in housing inflation.

While the Fed’s interest rate cuts could help ease some pressure on the housing market, its ability to address rising housing costs is limited, as these increases are driven by a lack of affordable supply and increasing development costs. In fact, tight monetary policy hurts housing supply because it increases the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise at an elevated pace despite Fed policy tightening. Additional housing supply is the primary solution to tame housing inflation.

Furthermore, the 2024 election result has put inflation back in the spotlight and added some downside risks to the economic outlook. Proposed tax cuts and tariffs could increase inflationary pressures, suggesting a more gradual easing cycle with a slightly higher terminal federal funds rate. Given the housing market’s sensitivity to interest rates, this could extend affordability crisis and constrain housing supply as builders continue to grapple with lingering supply chain challenges.

The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose by 0.2% in October on a seasonally adjusted basis, the same increase seen over the previous three months. Excluding the volatile food and energy components, the “core” CPI increased by 0.3% in October, the same increase as in August and September.

The price index for a broad set of energy sources remained unchanged in October, with declines in gasoline (-0.9%) and fuel oil (-4.6%) offset by increases in electricity (+1.2%) and natural gas (+0.3%). Meanwhile, the food index rose 0.2%, after a 0.4% increase in September. The index for food away from home increased by 0.2% and the index for food at home rose by 0.1%.

The index for shelter (+0.4%) was the largest contributor to the monthly increase in all items index, accounting for over 50% of the total increase. Other top contributors that rose in October include indexes for used cars and trucks (+2.7%), airline fares (+3.2%), medical care (+0.3%) and recreation (+0.4%). Meanwhile, the top contributors that experienced a decline include indexes for apparel (-1.5%), communication (-0.6%) and household furnishings and operations (-0.1%).

The index for shelter makes up more than 40% of the “core” CPI. The index saw a 0.4% rise in October, following an increase of 0.2% in September. The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) increased by 0.4% and 0.3% over the month. These gains have been the largest contributors to headline inflation in recent months. 

During the past twelve months, on a non-seasonally adjusted basis, the CPI rose by 2.6% in October, following a 2.4% increase in September. The “core” CPI increased by 3.3% over the past twelve months, the same increase as in September. The food index rose by 2.1%, while the energy index fell by 4.9%.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster than overall inflation, the real rent index rises and vice versa. The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

In October, the Real Rent Index remained unchanged for the second consecutive month. Over the first ten months of 2024, the monthly growth rate of the Real Rent Index averaged 0.1%, slower than the average of 0.2% in 2023.

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Student Housing Construction Investment Rises in the Third Quarter of 2024

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Private fixed investment in student dormitories increased by 2.2% to a seasonally adjusted annual rate (SAAR) of $3.9 billion in the third quarter of 2024. This rise follows a 7% decrease in the prior quarter. However, private fixed investment in dorms was 1.8% lower than a year ago, as the elevated interest rates place a damper on student housing construction.  

Private fixed investment in student housing experienced a surge after the Great Recession, as college enrollment increased from 17.2 million in 2006 to 20.4 million in 2011. However, during the pandemic, private fixed investment in student housing declined drastically from $4.4 billion (SAAR) in the last quarter of 2019 to a lower annual pace of $3 billion in the second quarter of 2021, as COVID-19 interrupted normal on-campus learning. According to the National Student Clearinghouse Research Center, college enrollment fell by 3.6% in the fall of 2020 and by 3.1% in the fall of 2021.  

Since then, private fixed investment has rebounded, as college enrollments show a slow but stabilizing recovery from pandemic driven declines. Effective in-person learning requires college students to return to campuses, boosting the student housing sector. Furthermore, the demand for student housing is growing robustly, because total enrollment in postsecondary institutions is projected to increase 8% from 2020 to 2030, according to the National Center for Education Statistics. 

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Multifamily Housing: Distribution, Building Size, and Gross Rent Across Congressional

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Approximately 27% of the national housing stock consists of multifamily homes—defined as residential buildings with multiple separate housing units within one structure. According to the 2023 American Community Survey 1-year estimates, these units range from small duplexes, triplexes, and quadplexes (2 to 4 units) to medium-sized buildings (5 to 49 units) and large complexes (50 or more units).

While most congressional districts have multifamily housing shares between 10% to 20% of total housing units, this proportion varies widely, from as low as 8% to as high as 98%. The map below illustrates the distribution of multifamily housing stock across congressional districts with larger shares indicated by bigger bubble size. This visualization shows that districts with the largest share of multifamily units are, unsurprisingly, concentrated in densely populated urban areas.

New York leads in this regard, with its 12th and 13th Districts – both encompassing upper and midtown Manhattan – having almost exclusively multifamily units at 98% each. In fact, eight out of the top 10 districts with the largest share of multifamily housing are in New York. Other areas with large shares include New Jersey’s 8th District, also within the New York metropolitan area, and Massachusetts’s 7th District that includes Boston. At the lower end of the distribution, North Carolina’s 8th District has only 8% multifamily units, while Michigan’s 2nd and 9th Districts, Arizona’s 9th District, and Florida’s 12th District all have around 9% multifamily units.

Building Sizes in Multifamily Units

In most congressional districts, multifamily units tend to be on the smaller side, with the majority consisting of buildings with 5 to 19 units, followed by those with 2 to 4 units. Duplexes, triplexes, and quadplexes (2 to 4 units) are especially common in the Northeast, various Mountain states, and parts of California. Apart from Illinois’s 4th District, which has the highest share of small multifamily units (70%), the remaining top five districts with the largest shares of 2 to 4 unit buildings are all in New York, each exceeding 60%.

Buildings with 5 to 19 units are more prevalent across the South and Midwest, with Maryland’s 2nd, 3rd and 4th Districts owning majority shares of this building type with 59%, 62% and 61%, respectively. High-density areas like New York’s 12th District, Florida’s 27th District – located within Miami-Dade County – and Washington, D.C. (at large), tend to have the largest multifamily (50 or more) buildings. North Dakota (at large) and Minnesota’s 6th District stand out as the only two congressional districts where the majority of multifamily buildings have between 20 to 49 multifamily units.

Gross Median Rent and Renter Cost Burden

Multifamily units are predominantly rented rather than owned, with 86% being occupied by renters. This trend holds across all multifamily types, with larger buildings generally more likely to be rental properties, while condominiums (owner-occupied units) are often smaller buildings. A Fannie Mae study on the multifamily market found that larger properties typically command higher monthly rents, especially in major metropolitan areas. The chart below corroborates this, showing that districts with higher shares of large multifamily buildings (50 or more units) also have higher median monthly rents (including utilities and fuel). However, lower median rents don’t always equate to more affordability, as even low-rent areas can have high renter cost burdens due to lower income levels. For example, New York’s 12th District has the highest median rent at $3,121, with 43% of renters burdened (spending over 30% of income on housing costs), a rate matched by Kentucky’s 5th District, where the median rent is only $727. Overall, despite rent prices moderating (see Real Rent Index), rental cost burdens remain high across the country, with only 23 of 436 congressional districts (including D.C.) having fewer than 40% of renter households burdened by housing costs.

Additional housing data for your congressional district are provided by the US Census Bureau here.

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Owner-Occupied Single-Family Housing Units Across Congressional Districts

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With elevated interest rates and rising home prices, 103.5 million households in the United States cannot afford a $495,750 median-priced new home. The growing affordability crisis makes housing a top issue for voters in the 2024 presidential election. Both presidential candidates have offered housing policy proposals to address our nation’s housing supply and affordability challenges.

Homeownership has been a crucial part of the American Dream for over a century as owning a home not only provides households with a stable place to live, but also offers an opportunity for households to accumulate assets and build wealth over time through equity.

A recent NAHB study on home buyer preferences revealed that a single-family detached home remained the top purchase preference for two out of every three buyers. In reality, only 54% of the total housing units in 2023 were owner-occupied single-family detached homes, according to NAHB analysis of American Community Survey (ACS) data. This equates to around 70 million homes of the total 131 million housing units.

In addition, a recent article in the Washington Post stated that “the new American Dream should be a townhouse (using the term of single-family attached homes in this post).” The article argues that townhouses are more affordable, need less maintenance, and foster a sense of community. Additionally, townhomes in medium-density residential neighborhoods can be a good option for younger home buyers. However, owner-occupied single-family attached homes only accounted for 4% of the total occupied housing units in 2023.

Single-Family Detached Homes Across Congressional Districts

Across congressional districts, the share of single-family detached homes among all owner-occupied housing units varies substantially, ranging from 3% to 95%.

Texas has a high share of owner-occupied single-family homes. Texas’s 20th congressional district has the highest share of single-family detached homes. All congressional districts in Texas have at least an 83% share of single-family detached homes. Four districts in Texas, two in Indiana and Nebraska, one in Iowa, and one in California report the top ten highest share of single-family detached homes.

At the bottom of the ranking, congressional districts in New York and Pennsylvania are on the list of the ten lowest shares of single-family detached homes. New York’s 12th, 13th, and 10th, where renter-occupied housing units exceed owner-occupied ones, have the lowest share with 3%, 4%, and 5%, respectively. In addition to a lower share of single-family detached homes, New York’s 12th and 13th have a low share of single-family attached homes, with 2% for both districts. In the District of Columbia, at-large, 22% of owner-occupied single-family housing units are detached, ranked as the 12th lowest share.

Despite the geographic variation, single-family detached homes dominate most of the owner-occupied housing markets. Out of all 436 congressional districts, only 18 congressional districts have a lower share of single-family detached homes than the national level of 54%.

Single-Family Attached Homes Across Congressional Districts

Although single-family attached homes are not as popular as single-family detached homes in the owner-occupied housing market, the share of single-family attached homes shows substantial variation across congressional districts, ranging from 0% to 78%.

Pennsylvania’s 3rd congressional district has about 78% single-family attached homes, followed by Pennsylvania’s 2nd district with 75% single-family attached homes, and Maryland’s 7th district with 57%. The District of Columbia, at-large, with only 22% single-family detached homes, was ranked as the fourth highest share of single-family attached homes (43%).

Single-family attached homes have become popular as more home buyers are looking for “medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities”, as mentioned in an NAHB blog post.

Median Home Value

The median value of owner-occupied housing units in the United States is $340,200, though it varies significantly across congressional districts depending on local housing supply and demand, property size, neighborhood, and overall economic factors. Coastal areas often have significantly higher median home values than rural regions.

Analysis of the 2023 ACS data shows that of the 14 congressional districts where median house value exceeds one million, 12 of them are in California. California’s 16th congressional district has the highest median home value of $1,820,400 among all congressional districts, with 81% of 159,895 owner-occupied housing units valuing more than one million dollars.

New York’s 12th and 10th congressional districts, with only 3% and 5% single-family detached homes, are the other two districts where median home value is over one million.

Additional housing data for your congressional district are provided by the US Census Bureau here.

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