Annual United States housing permits in 2016 experienced a slight -0.1% decline from 2015 to 2016. This overall decline is a deceleration from the 14% CAGR between 2010 and 2015. The first decline in multifamily permits since 2009 was accompanied by a low growth in single family in comparison to recent years. Annual growth for multifamily and for single family from 2015-2016 was -9% and 10% respectively, compared to a CAGR of 31% for multifamily and 14% for single family from 2010-2015.
Two important market patterns evolved in 2016. Single family growth rates varied from 2% in the Southwest to 13% in the Southeast. Overall single family experienced a 30% reduction overall from 14% CAGR from 2010-2015 to 10% in 2016. The largest single family growth was experienced in the Southeast at 13% and the West with 11% growth. The largest increase occurred in the Southeast with the number of permit units increasing from 245 thousand in 2015 to 271 thousand in 2016.
Multifamily unit construction grew from 2010–2015 with a 31% CAGR but declined at a rate of -9% in 2016. The Northeast was a major contributor to the multifamily permit decline. In the Northeast, multifamily permits dropped significantly by -49%, while single family only increased by 3% leading to an overall decline in the region.
Staying abreast of changing trends in housing permits is a critical strategic consideration for manufacturers and distributors of building materials. The recent 2016 housing permit data shows a shift in multifamily housing suggesting a potential change in terms of product mix and account targeting. Comparing 2016 growth with recent trends additionally suggests the Southeast and West regions will drive demand specifically for companies heavily focused in new single family construction. These growth rates however, indicate a slowing on the single family side as well and warrant an evaluation of the impact on your product demand.
HOUSING PERMITS SUMMARY
A summary of additional findings titled Housing Permits 2016 – Impact on Building Materials Demand is available for download.