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Issuances of new single-family permits in 2022 slowed in November, coming in 10.5% lower than the same month in 2021. A total of 921,626 permits, which typically lead to housing starts, were issued between January and November of 2022 compared to 1,029,208 over the same period a year earlier.
Declines occurred nationwide, with the largest drops of 13.9% and 13.6% coming in the West and Midwest. The Northeast and South, meanwhile, also posted smaller decreases of 10.2% and 8.4%, respectively.
Colorado recorded the sharpest drop of all states, as permits fell to 22,900 year to date from 31,741, a decrease of 27.9%. New Mexico, its neighbor to the south, however, saw the largest gain, rising 37.5% to 6,989 from 5,083 over the first 11 months of 2021. Overall, only five states and the District of Columbia reported increases.
The news comes after what many builders would term a downbeat year, with construction
"U.S. homebuilder stocks remained under pressure with the median one-year total return recording a negative 26.7% as of Jan. 4," S&P's report said.
All six of the top-performing publicly traded homebuilders posted drops in new orders as well, from 2.2% to 28% over the past year, the business intelligence provider found.
As they feel the pinch of lower business volumes, builders have used various strategies to adjust, including
A more positive indicator for homebuilders came out of the
A majority of homebuilders said they were still dealing with shortages for most materials, but much of that pressure has eased since mid 2021, according to the NAHB.
In NAHB's October homebuilder sentiment survey, over 80% of respondents reported a shortage in three major product categories: appliances, transformers and windows and doors. A majority said they had encountered availability issues for 17 out of the 25 categories tracked by the association.
A shortage of heating, ventilation and air conditoning systems were also cited by 76%, while a dearth of copper wiring was reported by 65%. Lightweight steel was seen as scarce by 53%, and ready-mix concrete by 49%.
Despite the prevalence of shortages, their severity also diminished for 18 out of the 24 product types compared to May 2021, when such data was last compiled. Transformers were not previously measured.
Fewer builders reported problems with wood products. Framing