Housing Completions Were Up In 2024, A Bright Spot For Builders

Looking back at 2024, housing completions appear to be a bright spot for builders. According to data released Friday by the U.S. Census Bureau, an estimated 1.628 million housing units were completed in 2024, up 12.4% from 2023.

“This means more homes on the market and more options for home buyers, which is good news for a housing market that has been underbuilt for over a decade,” Odeta Kushi, First American’s deputy chief economist, said in a statement. “Builders are feeling cautiously optimistic as they start 2025, buoyed by an ongoing shortage of inventory of existing homes—many of which are locked up by homeowners reluctant to sell due to elevated mortgage rates.”

Although housing completions were up for the full-year 2024, they were down in December, dropping 4.8% from November and 0.8% annually to a pace of 1.544 million units.

While the annual uptick in housing completions for 2024 is certainly good news for the inventory-starved housing market, housing starts data does not look quite as bright. In 2024, an estimated 1.364 housing units were started, while 1.471 million were permitted, an annual decline of 3.9% and 2.6%, respectively.

The declines in starts and permits come even as housing starts posted a sharp increase in December, jumping 15.8% month over month to 1.499 million units. This increase, however, was not enough, as it still marked a 4.4% decrease over the year prior.

Permits were also down in December, dropping 0.7% month over month and 3.1% annually to an estimated pace of 1.483 million units.

Despite the declines, single-family starts and permits jumped 3.3% and 1.6% month over month to annual paces of 1.05 million units and 992,000 units, respectively.

“While new construction picked up between November and December, there are still headwinds in the homebuilding sector,” Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. “As the new presidential administration takes office, there is still a lot of uncertainty around policies that have a direct impact on the homebuilding sector, including tariffs and immigration. Strong economic growth has led to higher inflation and borrowing costs, which has also created challenges for builders.”

While economists are happy with the level of construction in 2024, they say there is still work to be done.

“At the trough of the Great Financial Crisis correction, we were building 5 units per 1,000 households, a series low, and we are currently only building about 10 per 1,000 households, which is about the same as in 1991,” Kushi said. “We need to increase the sheer amount of construction in this country to not only keep up with new demand every year, but also make up for the underbuilding that has now been occurring for decades.”