Annual United States housing permits in 2015 grew a healthy 12% year-over-year, a slight deceleration from the 15% CAGR between 2010 and 2014. Multifamily growth continued to outpace single family for the nation as a whole, though this gap narrowed. Annual growth for multifamily and for single family from 2014-2015 was 18% and 9% respectively, compared to a CAGR of 27% for multifamily and 9% for single family from 2010-2014.
Several important regional patterns intensified in 2015. West and Southeast regions experienced the highest 2010-2014 single family CAGR and were also the only two regions where the single family growth rate increased in 2015. In the Northeast, multifamily permits have grown significantly faster than single family permits in recent years and 2015 was no exception with a huge 71% increase in multifamily which offset a decline in single family permits.
Several notable divergences from recent trends were also evident. The Southwest region, which was the second strongest in terms of overall growth from 2010-2014, saw a notable slowdown in 2015 and was essentially flat in both single family and multifamily units. Similarly, the Midwest region saw a slowdown in growth for both unit types. The Northeast jumped from fourth to the top spot in terms of overall permit growth, though as mentioned this was notably driven by multifamily permits. The Southeast region also picked up steam in 2015, outgrowing the Southwest and West regions and adding to its substantial national lead in terms of total annual permitted units.
Staying abreast of changing trends in housing permits is a critical strategic consideration for manufacturers and distributors of building materials. The recent 2015 housing permit data shows multifamily housing continues to grow faster than single family, suggesting a potential change in terms of product mix and account targeting. However, an evaluation of recent data highlights the gap in growth rates is narrowing and potentially becoming more regionally focused, particularly in the Northeast. Comparing 2015 growth with recent trends additionally suggests the Southeast and West regions will continue to drive demand for companies heavily focused in new single family construction, as single family growth rates picked up steam while other regions were flat.
Housing Permits Summary
A summary of additional findings titled Housing Permits – Potential Impact on Building Materials is available for download.