Residential construction resumed its upward trend after a brief pause in August. The U.S. Census Bureau and Department of Housing and Urban Development reported that all three measures of construction, permitting, housing starts, and unit completions, increased in September.
Permits for residential construction were up by 5.2 percent from August. Housing starts rose 1.9 percent in September which was 11.1 percent higher than the pace of starts last year. YTD there have been 936,600 units completed, an increase of 2.2 percent. Single-family completions are up 1.8 percent to 664,500 units and multifamily completions, at 265,000 units, represent 3.3 percent YTD growth.
Builders are gearing up for an even faster pace in the months ahead, which is welcome news for households wanting to buy a new home. The housing market is being constrained by the lack of inventory, with both new and existing homes being sold faster than new listings are arriving.
Home prices are increasing much faster than household incomes. Even though mortgage rates remain at record lows, unless more homes are built, first-time buyers will have an increasingly difficult time being able to find a home they can afford.
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