REALTORMag
After strong single-family home starts earlier this year, new-home construction is showing signs of softening. The Commerce Department reports that housing starts nationwide, including single-family and multifamily production, dropped 5.5 percent month over month in May to a seasonally adjusted annual rate of 1.09 million units.
Single-family production alone decreased 3.9 percent last month to 794,000 units, and single-family permits, a gauge of future construction activity, was down 1.9 percent to 779,000 units. “Housing shortages look to intensify and may well turn into a housing emergency if the discrepancy between housing demand and housing supply widens further,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “The falling housing starts and housing permits in May are befuddling given the lack of homes for sale and the quick pace of selling for newly constructed homes. Meanwhile, job creation of a consistent 2 million jobs a year will push up housing demand further. One thing that is moving up is the housing costs for consumers: higher home prices and higher rents.”
