New home starts from homebuilders fell a staggering 9.3%. Single-family starts decreased 8.5% to a 1.04 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 15% to a 381,000 pace. In total, the seasonally adjusted annual rate registered at only 1.42 million units. Builders are slowing some production of single-family homes as lumber and other material costs, along with interest rates, continue to rise. The West was the only region with an increase in new starts, a 17.6% increase from last month. Overall permits decreased 10.8% to a 1.68-million-unit annualized rate. Single-family home building is forecasted to expand in 2021, but at a slower rate as housing affordability is challenged by higher mortgage rates and rising construction costs.
The supply of existing homes at all-time lows, homebuilders will continue to have a key role to play in addressing the inventory shortage for a market chock full of eager home shoppers. The impact of construction labor on the velocity of new home construction. The growth in residential construction jobs supports further improvement in the pace of homebuilding because building a home does not readily lend itself to outsourcing and automation. Residential construction employment is easing as a headwind to future housing starts.