Starts for June increased by 6.3% from a revised downward number for May. Permits however dropped 5.1% which was an eight-month low. Rather than reflecting a lack of demand the fall is likely attributed to a hesitancy caused by expensive building material as well as shortages of labor and land.
The Commerce Department report, out yesterday, suggests a severe shortage in houses. Anyone looking for a home has experienced this across the nation as bidding wars are common. The demand is being driven by record, or near-record, low in mortgage rates, and the forced lockdown caused by the Covid 19 pandemic which has made buyers looking for more space.
Lumber prices are starting to fall but there are delivery delays for windows, heating units, refrigerators, and other items. Adding to the builder’s concern is a lack of available workers. The challenges to complete a home is and has been difficult.
These problems will be with us all summer, fall, and winter.