By BEX Staff for AZBEX
The United States has a shortage of 4.5 million housing units. Even though construction activity trended downward in 2022 and 2023, it remains greater than it was before the pandemic.
Developers are also working toward higher deliveries for improved affordability, as a combination of unmet demand and heightened costs have put new homes out of reach for much of the population.
To meet demand needs, builders are pivoting toward higher-density development. Single-family detached housing starts fell 8.9% in 2023 but attached single-family home starts increased 3.2%. Condo starts increased 8.1%.
Completions of single-family detached dropped 5.1%, but attached single-family completions rose 9.6% in 2023 compared with 2022.
The trend benefits both occupants and builders. Prospective occupants have a greater volume of units to choose from—and greater supply, in theory, means lower costs—while builders are able to enjoy consolidated land costs and build more units in smaller spaces.
The median lot area decreased by 700SF in 2023 versus 2022, while the median home size remained consistent at 2.2KSF.
Phoenix Activity Reflects Trends
Despite having one of the nation’s most prominent drops in affordability pre-to-post-pandemic, metro Phoenix remains one of the most prolific markets for residential construction, Zillow says.
The metro ranked second in the country for single-family permits in 2023, showing a 32% change year-over-year for January-August 2022 versus 2023.
Metro Phoenix has generated nearly 138,500 single-family permits from Jan. 2020-Aug. 2023 and realized a 54% increase in home values during the same period.