While construction crews hammer away at over a million new homes and builders navigate a complex landscape of rising costs and persistent labor shortages, the U.S. housing industry in 2023 revealed a tale of two markets: a resilient single-family sector showing surprising growth contrasted with a steep decline in multifamily construction.
Key Takeaways
- In 2023, US single-family housing starts totaled 977,000 units, marking a 5.6% increase from 2022
- New residential construction permits for single-family homes reached 935,000 units in 2023, up 4.2% year-over-year
- Multifamily housing starts in the US hit 477,000 units in 2023, a 22% decline from the previous year due to high interest rates
- US construction employment reached 8.03 million in March 2024, up 1.2% year-over-year
- Residential builders employed 1.1 million workers in 2023, per NAHB
- Construction industry added 214,000 jobs in 2023, with residential segment 45%
- Producer Price Index for residential construction rose 4.8% in 2023
- Median sales price of new single-family homes: $417,700 in 2023, up 3.9%
- Construction Cost Index (CCI) increased 5.2% year-over-year in Q4 2023
- Steel mill products for construction: +12% in 2023
- Cement consumption in residential: 120 million tons in 2023
- Softwood lumber usage: 35 billion board feet for homes in 2023
- US residential construction market size: $920 billion in 2023
- Single-family home sales: 668,000 new units in 2023, down 12%
- Homebuilder confidence index averaged 42 in 2023, lowest since 2012
The US housing market had mixed results in 2023, with strong single-family construction but a steep decline in apartment building.
Cost and Price Indices
- Producer Price Index for residential construction rose 4.8% in 2023
- Median sales price of new single-family homes: $417,700 in 2023, up 3.9%
- Construction Cost Index (CCI) increased 5.2% year-over-year in Q4 2023
- Average cost to build a single-family home: $428,215 in 2023 per NAHB
- Framing lumber prices up 2.1% in 2023 after 2022 decline
- Residential fixed investment deflator: 4.7% inflation in 2023
- Home price index (FHFA): +5.1% annual growth in Q4 2023
- Building materials cost share of new home: 57% in 2023, highest in decades
- Labor cost share in new home construction: 27% in 2023
- Lot cost percentage: 16% of total home cost in 2023
- Finished lot price average: $85,139 in 2023, up 10%
- Softwood lumber PPI: +1.5% in 2023
- Ready-mix concrete prices: up 6.3% in 2023
- Residential electricity construction costs: +8.2% in 2023
- Mortgage rate impact: 30-year fixed averaged 6.81% in 2023
- Builder cost of capital up 20% in 2023 due to rates
- Regional cost variation: Northeast home build cost $510,000 avg 2023
- South average build cost: $395,000 in 2023
- Midwest construction cost index: +4.9% in 2023
- West coast build costs: $520,000 median 2023
- Turnkey home price inflation: 6.2% in 2023
- Remodeling cost index up 1.8% in Q4 2023
- Wholesale building materials inflation: 3.4% annual 2023
- Custom home build average: $650,000 in 2023
- Spec home development cost: $380/sq ft in 2023
- Sq ft cost for new homes: $150 average in 2023, up from $140
- Insulation materials costs rose 7.1% in 2023
- Roofing products PPI: +4.5% 2023
- Gypsum products prices: up 9.2% due to shortages 2023
- Plywood prices declined 8% in late 2023
Cost and Price Indices Interpretation
It seems every element of building a home—from the lumber in its bones to the land beneath it—decided to have an expensive year together, pushing the dream of a new house further into the realm of "maybe someday" for many.
Economic and Market Trends
- US residential construction market size: $920 billion in 2023
- Single-family home sales: 668,000 new units in 2023, down 12%
- Homebuilder confidence index averaged 42 in 2023, lowest since 2012
- Residential construction GDP contribution: 4.1% in 2023
- New home inventory: 476,000 units end of 2023, up 20%
- Builder backlog: 6.3 months supply in Q4 2023
- Multifamily market vacancy: 5.8% in 2023
- Remodeling expenditure: $450 billion total in 2023
- Housing affordability index: 98.1 in 2023, worst since 1980s
- First-time buyer share: 28% of new home purchases 2023
- Investor purchases of new homes: 17% in 2023
- Average new home size: 2,235 sq ft in 2023, slight decline
- 2024 forecast: single-family sales 680,000 units
- Multifamily deliveries expected 390,000 units 2024
- Regional market growth: South 6% in residential spending 2023
- Builder profit margins: 10.2% average in 2023, down from 12%
- Rental market absorption rate: 93% for new units 2023
- Home price-to-income ratio: 5.6 nationally in 2023
- Construction spending total: $2.05 trillion in 2023, residential 45%
- Impact of rates: sales drop 15% per 1% rate hike in 2023 models
- Modular construction market: $12 billion, 5% share in 2023
- ADU construction boom: 50,000 units permitted 2023
- Energy-efficient homes sales: 25% premium price in 2023
- Shortage of homes: 4 million unit deficit estimated 2023
Economic and Market Trends Interpretation
Despite its massive $920 billion size, the U.S. housing industry in 2023 was a paradox of builder anxiety, historic unaffordability, and a stubborn, multi-million home shortage, all while Americans spent nearly as much fixing their old homes as building new ones.
Employment Statistics
- US construction employment reached 8.03 million in March 2024, up 1.2% year-over-year
- Residential builders employed 1.1 million workers in 2023, per NAHB
- Construction industry added 214,000 jobs in 2023, with residential segment 45%
- Average hourly earnings for construction workers: $35.42 in Q1 2024, up 4.5%
- Carpenter employment in residential: 850,000 in 2023, shortage of 100,000 noted
- Labor force participation in construction: 65.2% in 2023, below pre-pandemic 68%
- NAHB survey: 87% of builders report labor shortages in 2024
- Construction unemployment rate: 4.2% in March 2024
- Residential specialty trade contractors: 3.2 million employed in 2023
- Job openings in construction: 383,000 unfilled in Feb 2024
- Women in construction workforce: 11.2% in 2023, up from 9.9% in 2020
- Hispanic workers: 30% of construction labor force in 2023
- Apprentice programs trained 50,000 new construction workers in 2023
- Average construction worker age: 42.7 years in 2023, aging workforce issue
- Turnover rate in residential construction: 25% annually in 2023
- Productivity growth in residential building: 1.2% per year 2018-2023
- Union membership in construction: 12.6% in 2023
- Self-employed builders: 15% of residential workforce in 2023
- Construction wages grew 5.1% in 2023, outpacing inflation
- Entry-level carpenter wage: $22.50/hour median in 2023
- Foreman salaries average $85,000/year in residential sector 2023
- 60% of builders delay projects due to labor shortages per 2024 NAHB survey
- Construction employment in South: 2.9 million in 2023
- Midwest construction jobs: 1.1 million, stable in 2023
- Northeast residential employment down 2% to 750,000 in 2023
- West coast construction workforce: 1.6 million in 2023
- Temporary workers in residential: 8% of workforce in 2023
- Training hours per worker: 40 hours average in 2023 programs
- Quit rate in construction: 3.2% monthly average 2023
- Construction industry weekly earnings: $1,352 in Q4 2023
- Benefits as % of total compensation: 31.2% in construction 2023
Employment Statistics Interpretation
With nearly 9 in 10 builders scrambling to find workers and wages rising faster than a freshly framed wall, the industry is booming so hard it's practically building its own labor shortage.
Housing Starts and Permits
- In 2023, US single-family housing starts totaled 977,000 units, marking a 5.6% increase from 2022
- New residential construction permits for single-family homes reached 935,000 units in 2023, up 4.2% year-over-year
- Multifamily housing starts in the US hit 477,000 units in 2023, a 22% decline from the previous year due to high interest rates
- Total US housing starts in December 2023 were at a seasonally adjusted annual rate of 1.46 million units
- Building permits for single-family structures in 2023 averaged 946,000 annually, the highest since 2006 excluding pandemic years
- US housing completions reached 1.42 million units in 2023, with single-family at 967,000
- Permits for multifamily units dropped 25% in 2023 to 524,000, reflecting financing challenges
- In the South region, housing starts surged 8.7% to 645,000 units in 2023
- Northeast housing permits fell 12% in 2023 amid labor shortages, totaling 112,000 units
- Midwest single-family starts increased 3.2% to 183,000 units in 2023
- West region multifamily starts declined 30% to 140,000 units due to costs
- Total US building permits in 2023: 1.46 million units, down 2.6% from 2022 peak
- Single-family authorizations in October 2023: 947,000 annual rate, up 6.5%
- Housing starts under construction averaged 1.05 million units in 2023
- Completions for single-family homes: 1.01 million in 2023, up 7%
- Permits issued in urban areas: 1.12 million in 2023
- Rural housing starts: 245,000 units in 2023, stable growth
- Single-family starts in Q4 2023: 1.027 million annual rate
- Multifamily permits in Q1 2024: down 14% to 370,000 rate
- Total starts forecast for 2024: 1.43 million units by NAHB
- Single-family builders' permit confidence index at 72 in Jan 2024
- Housing starts in Texas: 250,000 units in 2023, leading nation
- Florida multifamily starts: 120,000 in 2023
- California single-family permits: 85,000 in 2023, down 5%
- New York total starts: 45,000 units in 2023
- Single-family starts per 1,000 population highest in South at 4.2 in 2023
- National average housing starts per capita: 3.1 per 1,000 in 2023
- Permits revised upward for 2023 by 1.5% in annual data
- Detached single-family starts: 954,000 in 2023
- Attached single-family starts: 23,000 in 2023, minor share
Housing Starts and Permits Interpretation
The housing market, like a stubborn homeowner renovating on a budget, is seeing single-family homes get a slight, hopeful upgrade while high interest rates have bluntly evicted the multifamily sector from its rapid expansion.
Material Usage and Prices
- Steel mill products for construction: +12% in 2023
- Cement consumption in residential: 120 million tons in 2023
- Softwood lumber usage: 35 billion board feet for homes in 2023
- Engineered wood products market: $10.2 billion in US residential 2023
- Asphalt roofing shingles demand: 12 billion sq ft in 2023
- Drywall consumption: 25 billion sq ft for new homes 2023
- Windows and doors market: $18.5 billion in residential new construction 2023
- HVAC equipment shipments for homes: 5.2 million units in 2023
- Plumbing fixtures usage: 4.8 million toilets installed in new homes 2023
- Electrical wire and cable for residential: 2.5 billion feet used 2023
- OSB usage in single-family: 12 billion sq ft in 2023
- Fiberglass insulation batts: 1.2 billion sq ft produced for homes 2023
- Vinyl siding market share: 35% of new home exteriors in 2023
- Brick usage declined to 800 million units in new homes 2023
- Spray foam insulation volume: 500 million board ft in residential 2023
- Solar panels installed on new homes: 150,000 systems in 2023
- EV charger installations in garages: 80,000 in new builds 2023
- Recycled content in materials: 25% average in new homes 2023
- Lumber import volume: 28 billion board feet in 2023, mostly Canada
- Steel framing usage: 5% of single-family market in 2023
- Modular home factory production: 120,000 units using prefab materials 2023
- PEX piping replaced copper in 60% of new homes 2023
- Quartz countertops: 70% market share in kitchens 2023
- LED lighting fixtures: 95% of new installs in 2023
- Low-E glass standard in 85% windows 2023
- Hardie plank fiber cement siding: 25% share in 2023
Material Usage and Prices Interpretation
The industry seems to be hammering together a remarkably modern, efficient, and tech-integrated American home, though it appears we have collectively decided to build it almost entirely without bricks.
Sources & References
- Reference 1CENSUScensus.govVisit source
- Reference 2NAHBnahb.orgVisit source
- Reference 3BLSbls.govVisit source
- Reference 4ABCabc.orgVisit source
- Reference 5SALARYsalary.comVisit source
- Reference 6NCCERnccer.orgVisit source
- Reference 7ENSPIREANALYTICSenspireanalytics.comVisit source
- Reference 8BEAbea.govVisit source
- Reference 9FHFAfhfa.govVisit source
- Reference 10FREDfred.stlouisfed.orgVisit source
- Reference 11RDCrdc.comVisit source
- Reference 12CORELOGICcorelogic.comVisit source
- Reference 13LEADINGINDICATORleadingindicator.orgVisit source
- Reference 14HOMEADVISORhomeadvisor.comVisit source
- Reference 15BUILDERONLINEbuilderonline.comVisit source
- Reference 16TRADINGECONOMICStradingeconomics.comVisit source
- Reference 17PORTLANDCEMENTportlandcement.orgVisit source
- Reference 18STATISTAstatista.comVisit source
- Reference 19USGSusgs.govVisit source
- Reference 20AHRIDIRECTORYahridirectory.orgVisit source
- Reference 21COPPERcopper.orgVisit source
- Reference 22RANDOMLENGTHSrandomlengths.comVisit source
- Reference 23VINYLSIDINGvinylsiding.orgVisit source
- Reference 24GOBRICKgobrick.comVisit source
- Reference 25SPRAYFOAMsprayfoam.orgVisit source
- Reference 26SEIAseia.orgVisit source
- Reference 27ENERGYenergy.govVisit source
- Reference 28TRADEtrade.govVisit source
- Reference 29SFAHOMEsfahome.orgVisit source
- Reference 30MODULARmodular.orgVisit source
- Reference 31PLASTICSplastics.americanchemistry.comVisit source
- Reference 32ENERGYSTARenergystar.govVisit source
- Reference 33JAMESHARDIEjameshardie.comVisit source
- Reference 34JCHSjchs.harvard.eduVisit source
- Reference 35NARnar.realtorVisit source
- Reference 36CBREcbre.comVisit source
- Reference 37REALTORrealtor.comVisit source
- Reference 38FREDDIEMACfreddiemac.comVisit source
- Reference 39MORDORINTELLIGENCEmordorintelligence.comVisit source