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
1Producer Price Index for residential construction rose 4.8% in 2023
Verified2Median sales price of new single-family homes: $417,700 in 2023, up 3.9%
Verified3Construction Cost Index (CCI) increased 5.2% year-over-year in Q4 2023
Verified4Average cost to build a single-family home: $428,215 in 2023 per NAHB
Directional5Framing lumber prices up 2.1% in 2023 after 2022 decline
Single source6Residential fixed investment deflator: 4.7% inflation in 2023
Verified7Home price index (FHFA): +5.1% annual growth in Q4 2023
Verified8Building materials cost share of new home: 57% in 2023, highest in decades
Verified9Labor cost share in new home construction: 27% in 2023
Directional10Lot cost percentage: 16% of total home cost in 2023
Single source11Finished lot price average: $85,139 in 2023, up 10%
Verified12Softwood lumber PPI: +1.5% in 2023
Verified13Ready-mix concrete prices: up 6.3% in 2023
Verified14Residential electricity construction costs: +8.2% in 2023
Directional15Mortgage rate impact: 30-year fixed averaged 6.81% in 2023
Single source16Builder cost of capital up 20% in 2023 due to rates
Verified17Regional cost variation: Northeast home build cost $510,000 avg 2023
Verified18South average build cost: $395,000 in 2023
Verified19Midwest construction cost index: +4.9% in 2023
Directional20West coast build costs: $520,000 median 2023
Single source21Turnkey home price inflation: 6.2% in 2023
Verified22Remodeling cost index up 1.8% in Q4 2023
Verified23Wholesale building materials inflation: 3.4% annual 2023
Verified24Custom home build average: $650,000 in 2023
Directional25Spec home development cost: $380/sq ft in 2023
Single source26Sq ft cost for new homes: $150 average in 2023, up from $140
Verified27Insulation materials costs rose 7.1% in 2023
Verified28Roofing products PPI: +4.5% 2023
Verified29Gypsum products prices: up 9.2% due to shortages 2023
Directional30Plywood prices declined 8% in late 2023
Single sourceCost 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
1US residential construction market size: $920 billion in 2023
Verified2Single-family home sales: 668,000 new units in 2023, down 12%
Verified3Homebuilder confidence index averaged 42 in 2023, lowest since 2012
Verified4Residential construction GDP contribution: 4.1% in 2023
Directional5New home inventory: 476,000 units end of 2023, up 20%
Single source6Builder backlog: 6.3 months supply in Q4 2023
Verified7Multifamily market vacancy: 5.8% in 2023
Verified8Remodeling expenditure: $450 billion total in 2023
Verified9Housing affordability index: 98.1 in 2023, worst since 1980s
Directional10First-time buyer share: 28% of new home purchases 2023
Single source11Investor purchases of new homes: 17% in 2023
Verified12Average new home size: 2,235 sq ft in 2023, slight decline
Verified132024 forecast: single-family sales 680,000 units
Verified14Multifamily deliveries expected 390,000 units 2024
Directional15Regional market growth: South 6% in residential spending 2023
Single source16Builder profit margins: 10.2% average in 2023, down from 12%
Verified17Rental market absorption rate: 93% for new units 2023
Verified18Home price-to-income ratio: 5.6 nationally in 2023
Verified19Construction spending total: $2.05 trillion in 2023, residential 45%
Directional20Impact of rates: sales drop 15% per 1% rate hike in 2023 models
Single source21Modular construction market: $12 billion, 5% share in 2023
Verified22ADU construction boom: 50,000 units permitted 2023
Verified23Energy-efficient homes sales: 25% premium price in 2023
Verified24Shortage of homes: 4 million unit deficit estimated 2023
DirectionalEconomic 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
1US construction employment reached 8.03 million in March 2024, up 1.2% year-over-year
Verified2Residential builders employed 1.1 million workers in 2023, per NAHB
Verified3Construction industry added 214,000 jobs in 2023, with residential segment 45%
Verified4Average hourly earnings for construction workers: $35.42 in Q1 2024, up 4.5%
Directional5Carpenter employment in residential: 850,000 in 2023, shortage of 100,000 noted
Single source6Labor force participation in construction: 65.2% in 2023, below pre-pandemic 68%
Verified7NAHB survey: 87% of builders report labor shortages in 2024
Verified8Construction unemployment rate: 4.2% in March 2024
Verified9Residential specialty trade contractors: 3.2 million employed in 2023
Directional10Job openings in construction: 383,000 unfilled in Feb 2024
Single source11Women in construction workforce: 11.2% in 2023, up from 9.9% in 2020
Verified12Hispanic workers: 30% of construction labor force in 2023
Verified13Apprentice programs trained 50,000 new construction workers in 2023
Verified14Average construction worker age: 42.7 years in 2023, aging workforce issue
Directional15Turnover rate in residential construction: 25% annually in 2023
Single source16Productivity growth in residential building: 1.2% per year 2018-2023
Verified17Union membership in construction: 12.6% in 2023
Verified18Self-employed builders: 15% of residential workforce in 2023
Verified19Construction wages grew 5.1% in 2023, outpacing inflation
Directional20Entry-level carpenter wage: $22.50/hour median in 2023
Single source21Foreman salaries average $85,000/year in residential sector 2023
Verified2260% of builders delay projects due to labor shortages per 2024 NAHB survey
Verified23Construction employment in South: 2.9 million in 2023
Verified24Midwest construction jobs: 1.1 million, stable in 2023
Directional25Northeast residential employment down 2% to 750,000 in 2023
Single source26West coast construction workforce: 1.6 million in 2023
Verified27Temporary workers in residential: 8% of workforce in 2023
Verified28Training hours per worker: 40 hours average in 2023 programs
Verified29Quit rate in construction: 3.2% monthly average 2023
Directional30Construction industry weekly earnings: $1,352 in Q4 2023
Single source31Benefits as % of total compensation: 31.2% in construction 2023
VerifiedEmployment 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
1In 2023, US single-family housing starts totaled 977,000 units, marking a 5.6% increase from 2022
Verified2New residential construction permits for single-family homes reached 935,000 units in 2023, up 4.2% year-over-year
Verified3Multifamily housing starts in the US hit 477,000 units in 2023, a 22% decline from the previous year due to high interest rates
Verified4Total US housing starts in December 2023 were at a seasonally adjusted annual rate of 1.46 million units
Directional5Building permits for single-family structures in 2023 averaged 946,000 annually, the highest since 2006 excluding pandemic years
Single source6US housing completions reached 1.42 million units in 2023, with single-family at 967,000
Verified7Permits for multifamily units dropped 25% in 2023 to 524,000, reflecting financing challenges
Verified8In the South region, housing starts surged 8.7% to 645,000 units in 2023
Verified9Northeast housing permits fell 12% in 2023 amid labor shortages, totaling 112,000 units
Directional10Midwest single-family starts increased 3.2% to 183,000 units in 2023
Single source11West region multifamily starts declined 30% to 140,000 units due to costs
Verified12Total US building permits in 2023: 1.46 million units, down 2.6% from 2022 peak
Verified13Single-family authorizations in October 2023: 947,000 annual rate, up 6.5%
Verified14Housing starts under construction averaged 1.05 million units in 2023
Directional15Completions for single-family homes: 1.01 million in 2023, up 7%
Single source16Permits issued in urban areas: 1.12 million in 2023
Verified17Rural housing starts: 245,000 units in 2023, stable growth
Verified18Single-family starts in Q4 2023: 1.027 million annual rate
Verified19Multifamily permits in Q1 2024: down 14% to 370,000 rate
Directional20Total starts forecast for 2024: 1.43 million units by NAHB
Single source21Single-family builders' permit confidence index at 72 in Jan 2024
Verified22Housing starts in Texas: 250,000 units in 2023, leading nation
Verified23Florida multifamily starts: 120,000 in 2023
Verified24California single-family permits: 85,000 in 2023, down 5%
Directional25New York total starts: 45,000 units in 2023
Single source26Single-family starts per 1,000 population highest in South at 4.2 in 2023
Verified27National average housing starts per capita: 3.1 per 1,000 in 2023
Verified28Permits revised upward for 2023 by 1.5% in annual data
Verified29Detached single-family starts: 954,000 in 2023
Directional30Attached single-family starts: 23,000 in 2023, minor share
Single sourceHousing 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
1Steel mill products for construction: +12% in 2023
Verified2Cement consumption in residential: 120 million tons in 2023
Verified3Softwood lumber usage: 35 billion board feet for homes in 2023
Verified4Engineered wood products market: $10.2 billion in US residential 2023
Directional5Asphalt roofing shingles demand: 12 billion sq ft in 2023
Single source6Drywall consumption: 25 billion sq ft for new homes 2023
Verified7Windows and doors market: $18.5 billion in residential new construction 2023
Verified8HVAC equipment shipments for homes: 5.2 million units in 2023
Verified9Plumbing fixtures usage: 4.8 million toilets installed in new homes 2023
Directional10Electrical wire and cable for residential: 2.5 billion feet used 2023
Single source11OSB usage in single-family: 12 billion sq ft in 2023
Verified12Fiberglass insulation batts: 1.2 billion sq ft produced for homes 2023
Verified13Vinyl siding market share: 35% of new home exteriors in 2023
Verified14Brick usage declined to 800 million units in new homes 2023
Directional15Spray foam insulation volume: 500 million board ft in residential 2023
Single source16Solar panels installed on new homes: 150,000 systems in 2023
Verified17EV charger installations in garages: 80,000 in new builds 2023
Verified18Recycled content in materials: 25% average in new homes 2023
Verified19Lumber import volume: 28 billion board feet in 2023, mostly Canada
Directional20Steel framing usage: 5% of single-family market in 2023
Single source21Modular home factory production: 120,000 units using prefab materials 2023
Verified22PEX piping replaced copper in 60% of new homes 2023
Verified23Quartz countertops: 70% market share in kitchens 2023
Verified24LED lighting fixtures: 95% of new installs in 2023
Directional25Low-E glass standard in 85% windows 2023
Single source26Hardie plank fiber cement siding: 25% share in 2023
VerifiedMaterial 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
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