The housing shortage deepened in January as the supply dropped 11 percent. But a New Residential Construction Report brings hope: Single-family permits were up 6.4 percent in January and 20.2 percent over the year. Though it will still take quite some time to recover from the lack of inventory, these elevated numbers are indicators that builders are ready to start tackling the affordable housing crisis. And since demand is up due to low mortgage rates, a booming economy, and changing homeowner demographics, this renewed effort will provide some much-needed relief.
Overall housing supply dropped 11% last month, but according to the Census Bureau’s latest construction numbers, builders are finally stepping in to help.
Today’s New Residential Construction Report shows that single-family building permits were up 6.4% in January and 20.2% over the year.
According to Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis at the National Association of Home Builders, this is a “useful indicator of future construction activity” and falls in line with recent builder sentiments. The last three NAHB/Wells Fargo Housing Market Indices show builder confidence at its highest point since late 2017.
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