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Residential construction on the rise amid major inventory shortage

April 22, 2021

Residential housing starts rose 19.4 percent from February to March, according to a new report from the US Census Bureau

Amid a nationwide inventory shortage, construction rates jumped across the board from February to March.

Residential housing starts rose 19.4 percent to a seasonally adjusted annual rate of 1,739,000, according to a new sales report released Wednesday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. That is also a 37 percent increased from March 2020.

“Home construction is booming, with housing starts in March at their highest level since June 2006,” Holden Lewis, the home and mortgage expert at NerdWallet, said in a statement. “Builders are breaking ground at a pace we haven’t seen since before the Great Recession, knowing that the demand is there. Not enough existing homes are for sale, so buyers are shopping for new homes, too.”

Building permits for new construction rose by 2.7 percent to a seasonally adjusted annual rate of 1,766,000 while housing completions rose 16.6 percent to a seasonally adjusted rate of 1,580,000.

However, a recent report from Freddie Mac found that builders would need to construct 3.8 million single-family homes just to catch up with existing demand.

“Our tracking of homebuyer migration patterns also indicates that there continues to be an above-normal pace of moving from some larger urban areas and towards suburban regions, which also helps support single-family construction. Suburban multifamily housing construction is also benefitting from this trend.”

 

Source Inman

Written by Veronika Bondarenko

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