Despite a mixed bag of economic signals last year, the single-family housing market proved resilient, as U.S. starts grew 5.6% in 2023 and builders navigated high mortgage rates, labor shortages, and shifting material costs to keep the industry driving forward.
Key Takeaways
- In 2023, U.S. single-family housing starts totaled 954,000 units, a 5.6% increase from 2022, driven by lower interest rates in late year
- Total U.S. housing starts for 2023 were 1.41 million units, down 2.2% from 2022 amid high mortgage rates
- Building permits for new single-family homes in December 2023 stood at 927,000 units annualized, up 3.0% from November
- U.S. construction industry employment reached 8.01 million in March 2024, up 16,000 from February
- Construction sector added 217,000 jobs in 2023, averaging 18,000 per month
- Average hourly earnings for construction workers in 2023: $35.07, up 4.5% YoY
- U.S. construction spending totaled $2.1 trillion in 2023, up 7% from 2022
- Residential construction spending 2023: $899 billion, 11% of GDP
- Nonresidential spending 2023: $520 billion private, $680 billion public
- Lumber prices average 2023: $450 per thousand board feet, down 20% YoY
- Ready-mix concrete cost increase 2023: 6.2% YoY to $160 per cubic yard
- Construction labor cost index 2023: up 4.5% to average $35/hour
- U.S. homebuilder confidence index forecasted 2024 average at 52, up from 44 in 2023
- 72% of builders reported supply chain delays in 2023 NAHB survey
- Net-zero energy homes built 2023: 5% of new single-family starts
Despite a weak multifamily sector, single-family construction grew in 2023 due to strong completions and permits.
Cost and Pricing
- Lumber prices average 2023: $450 per thousand board feet, down 20% YoY
- Ready-mix concrete cost increase 2023: 6.2% YoY to $160 per cubic yard
- Construction labor cost index 2023: up 4.5% to average $35/hour
- Softwood lumber import tariffs impact: added $1,800 per home in 2023 costs
- Steel prices for construction 2023 average: $950 per ton, up 2%
- Diesel fuel cost for builders 2023: $3.80/gallon average
- Architectural services cost rise 2023: 5.1%
- Plumbing products PPI 2023: up 3.8%
- Average cost to build single-family home 2023: $428,000, up 5%
- Gypsum products price index 2023: +4.2%
- Electrical wiring PPI 2023: up 6.5%
- Asphalt price increase 2023: 12% to $500/ton
- Builder material cost share of home price 2023: 58%
- HVAC equipment costs 2023: up 7.1%
- Framing lumber cost per home 2023: $38,000 average
- Finished lumber PPI 2023: -10% due to oversupply
- Concrete products price rise Q4 2023: 2.1% QoQ
- Roofing asphalt shingles cost 2023: $120/square, up 8%
- Insulation materials PPI 2023: +5.3%
- Site preparation labor costs 2023: $25,000 per home average
- Windows/doors cost share 2023: 6% of total home cost
- Excavation costs 2023: up 6% to $12,000 average
- Plumbing fixtures PPI 2023: +4.0%
- Foundation concrete cost 2023: $28,000 per home
- Electrical systems cost 2023: $22,000 average per home, up 7%
- Labor cost share of new home 2023: 27%
Cost and Pricing Interpretation
While lumber finally stopped acting like a tech stock, everything else from the ground up—concrete, labor, wiring, and even the diesel to haul it—continued its relentless climb, proving that building a house is a masterclass in getting squeezed from all sides.
Economic Indicators
- U.S. construction spending totaled $2.1 trillion in 2023, up 7% from 2022
- Residential construction spending 2023: $899 billion, 11% of GDP
- Nonresidential spending 2023: $520 billion private, $680 billion public
- Construction GDP contribution 2023: 4.2% of total U.S. GDP at $1.1 trillion
- Builder profitability average 2023: 8.5% net margin per NAHB survey
- New home sales revenue 2023: $250 billion
- Construction inflation rate 2023: 5.8% for inputs
- Single-family home average sales price 2023: $417,700, up 3%
- Multifamily construction spending Q4 2023: $120 billion annualized
- Public construction spending growth 2023: 12% to $400 billion
- Builder backlog value 2023 average: $1.2 million per firm
- Construction industry output 2023: $1.9 trillion real terms
- Highway construction spending 2023: $150 billion, up 10%
- Average builder revenue per home 2023: $450,000
- Total construction investment 2023 as % GDP: 13.5%
- Private nonresidential spending 2023: $520 billion, flat YoY
- Manufacturing facilities spending 2023: $100 billion peak
- Construction value added 2023: $850 billion
- Single-family remodeling spending 2023: $450 billion
- Educational construction spending 2023: $90 billion, up 8%
- Builder confidence index December 2023: 47
- Total construction starts value 2023: $1.2 trillion per Dodge
- Healthcare facilities spending 2023: $60 billion
- Construction sector multiplier effect on economy: 11.7 jobs per direct job in 2023
- Data center construction spending 2023: $25 billion, up 50%
- Power plant construction 2023: $70 billion
Economic Indicators Interpretation
America’s builders are walking a tightrope of massive spending and slender profits, where the nation’s trillion-dollar backbone is built on a thin 8.5% margin while inflation nips at its heels and public money tries to pave the way forward.
Labor and Employment
- U.S. construction industry employment reached 8.01 million in March 2024, up 16,000 from February
- Construction sector added 217,000 jobs in 2023, averaging 18,000 per month
- Average hourly earnings for construction workers in 2023: $35.07, up 4.5% YoY
- Residential builders employment: 730,000 in 2023, up 2% from 2022
- Construction unemployment rate December 2023: 4.1%, below national average of 3.7%
- Nonresidential construction employment: 2.9 million in Q4 2023
- Carpenter employment in construction: 1.04 million in 2023, up 1.5%
- Labor shortage affected 87% of builders in 2023 NAHB survey
- Construction average weekly hours worked: 39.4 in 2023
- Heavy and civil engineering construction jobs: 2.1 million in 2023
- Women in construction workforce: 11.2% in 2023, up from 10.9% in 2022
- Construction job openings: 383,000 in January 2024
- Median annual wage for construction managers 2023: $104,900
- Electricians in construction: 650,000 employed in 2023
- Construction employment growth in South: 120,000 jobs added 2023
- Quit rate in construction 2023: 2.1% monthly average
- Construction laborers employment: 940,000 in 2023
- Apprentices in construction trades: 570,000 in 2023, up 5%
- Construction employment by age 25-54: 5.6 million in 2023, 70% of total
- Hispanic workers in construction: 30% of workforce in 2023
- Construction job growth Q1 2024: 56,000 jobs
- Operating engineers employment: 410,000 in 2023
- Construction turnover rate 2023: 4.2% quarterly
- Self-employed builders: 15% of construction workforce in 2023
- Construction managers median wage growth 2023: 6.2%
- Drywall installers employment: 120,000 in 2023
- Construction employment Northeast: 1.1 million in 2023
- Total construction payroll employment peak 2023: 8.02 million in October
- Painters in construction: 380,000 employed 2023
Labor and Employment Interpretation
The construction industry is building a remarkably resilient house of cards, where steady job growth and rising wages are fueled by a chronic labor shortage, suggesting that while the paychecks are getting heavier, there simply aren't enough hands to carry them.
Production Statistics
- In 2023, U.S. single-family housing starts totaled 954,000 units, a 5.6% increase from 2022, driven by lower interest rates in late year
- Total U.S. housing starts for 2023 were 1.41 million units, down 2.2% from 2022 amid high mortgage rates
- Building permits for new single-family homes in December 2023 stood at 927,000 units annualized, up 3.0% from November
- U.S. housing completions in 2023 reached 1.43 million units, with single-family at 1.01 million, up 8.1% year-over-year
- Multifamily housing starts in 2023 were 456,000 units, down 19% from 2022 due to high construction costs
- In Q4 2023, U.S. housing starts averaged 1.41 million units at a seasonally adjusted annual rate
- Single-family building permits issued in 2023 totaled 950,000 units, a 4% rise from prior year
- Total housing completions for single-family in Q1 2024 were 271,000 units, up 10.5% from Q1 2023
- Multifamily permits in 2023 reached 500,000 units annualized average, down from 2022 peak
- U.S. new residential construction spending in 2023 was $899 billion, up 5% from 2022
- Housing starts in the South region in 2023 were 620,000 units, 44% of national total
- January 2024 single-family starts were 1.03 million annualized, highest since March 2023
- Total permits in 2023 averaged 1.45 million units annually, down 5% from 2022
- Single-family completions in 2023 Q4 were 270,000 units, up 12% quarter-over-quarter
- Multifamily starts dropped to 320,000 annualized in February 2024, down 30% YoY
- New home sales in 2023 totaled 668,000 units, down 11% from 2022
- Building permits for single-family in Northeast 2023 were 120,000 units
- Housing starts under construction inventory in Dec 2023 was 475,000 units
- Total residential permits issued in Midwest 2023: 180,000 units
- Single-family starts in West region 2023: 210,000 units, up 2%
- Completions for multifamily in 2023: 430,000 units nationally
- March 2024 housing starts: 1.48 million annualized, up 9% MoM
- Permits for 5+ unit structures 2023: 480,000 annualized
- Single-family housing starts Q1 2024: 280,000 units
- Total new home inventory for sale end-2023: 184,000 units, 4.7 months supply
- Construction spending on single-family residential Dec 2023: $170 billion annualized
- Multifamily completions Q1 2024: 110,000 units, up 15%
- Housing permits West region 2023: 250,000 units
- Under construction single-family Dec 2023: 320,000 units
- National average housing starts per 1,000 population 2023: 4.2 units
Production Statistics Interpretation
The single-family sector’s cautious optimism is being framed by high rates and costs, but builders are nailing the foundation for a potential rebound, even as the multifamily side seems to be hitting a few snags in the drywall.
Regional and Demographic
- Single-family detached homes 65% of new sales in South 2023
- Median age of homebuyers for new homes 2023: 52 years
- New home sales in California 2023: 45,000 units, down 10%
- Texas housing starts 2023: 180,000 units, 13% national share
- First-time buyers of new homes 2023: 28% of market
- Florida single-family permits 2023: 120,000, up 5%
- Household income for new home buyers average 2023: $128,000
- Northeast housing completions 2023: 110,000 units
- Midwest new home sales 2023: 85,000 units
- Hispanic buyers new homes 2023: 18% share, up 2%
- West region multifamily starts 2023: 120,000 units
- Baby boomer new home purchases 2023: 22%
- Georgia starts 2023: 45,000 units
- New homes with 3+ bedrooms 2023: 85% nationally
- Arizona permits 2023: 35,000 single-family
- Millennial buyers new homes 2023: 35% share
- North Carolina sales 2023: 50,000 new homes
- Married couples buying new homes 2023: 72%
- South Atlantic starts 2023: 350,000 units
- Households with children new buyers 2023: 45%
- Washington state completions 2023: 25,000 units
- New home size average 2023: 2,413 sq ft
- Nevada new sales 2023: 15,000 units, down 15%
- White buyers share 2023: 75% new homes
- Pacific division starts 2023: 140,000 units
- Trade-up buyers 2023: 40% of new home market
- Tennessee permits 2023: 30,000
- New homes under 2,000 sq ft 2023: 20%
Regional and Demographic Interpretation
The South's love affair with spacious single-family homes marches on, led by increasingly older and affluent buyers, while millennials and Hispanics slowly chip away at the market's traditional dominance despite a nationwide cooling that spares no state entirely, not even the mighty Sunbelt.
Trends and Sustainability
- U.S. homebuilder confidence index forecasted 2024 average at 52, up from 44 in 2023
- 72% of builders reported supply chain delays in 2023 NAHB survey
- Net-zero energy homes built 2023: 5% of new single-family starts
- Adoption of modular construction 2023: 15% of builders using prefab methods
- EV charger installations in new homes 2023: 12% of builds, up 50% YoY
- Sustainable materials use by builders 2023: 68% incorporating recycled content
- Builder outlook for 2024 sales: 25% expect increase per NAHB
- Off-site construction market growth 2023-2028 CAGR: 6.5%
- Solar panel integrations in new homes 2023: 8%
- Water-efficient fixtures standard in 82% new homes 2023
- 3D-printed homes completed 2023: 50 units in U.S.
- Builder traffic index 2023 average: 35, indicating buyer hesitation
- Smart home tech in 65% new builds 2023, up from 55% 2022
- Mass timber use in multifamily 2023: 10% of projects
- Carbon emission reductions targeted: 40% by 2030 in builder pledges
- Tiny homes market growth 2023: 12% YoY to $5 billion
- Builder concerns over regulations 2023: 54% top issue
- Accessory dwelling units (ADUs) permitted 2023: 20,000 nationwide, up 30%
- Green certifications like LEED in 22% commercial builds 2023
- Robotics adoption in construction 2023: 18% of large firms
- Builder price cuts average 2023: 5% on spec homes
- Multifamily vacancy rate 2023 Q4: 6.6%
- AI use in site planning by builders 2023: 25%
- Recycled content in asphalt 2023: 25% average in roads
- Builder incentives for energy efficiency 2023: offered by 75%
- Forecast single-family starts 2024: 970,000 units
Trends and Sustainability Interpretation
While builder confidence shrugs off supply chain woes with cautious optimism, the industry’s real momentum is found in a quiet but relentless march toward sustainability and efficiency, even if it has to drag a hesitant buyer and a pile of regulations along for the ride.
Sources & References
- Reference 1CENSUScensus.govVisit source
- Reference 2NAHBnahb.orgVisit source
- Reference 3BLSbls.govVisit source
- Reference 4DOLdol.govVisit source
- Reference 5BEAbea.govVisit source
- Reference 6AGCagc.orgVisit source
- Reference 7CONSTRUCTIONconstruction.comVisit source
- Reference 8CONSTRUCTIONDIVEconstructiondive.comVisit source
- Reference 9TRADINGECONOMICStradingeconomics.comVisit source
- Reference 10EIAeia.govVisit source
- Reference 11STATISTAstatista.comVisit source
- Reference 12WOODWORKSwoodworks.orgVisit source
- Reference 13USGBCusgbc.orgVisit source
- Reference 14MCKINSEYmckinsey.comVisit source
- Reference 15FHWAfhwa.dot.govVisit source