Housing production cools as costs climb
Washington, DC – According to the National Association of Home Builders (NAHB), home construction production fell in April due to the increased cost of building materials priced at potential home buyers. According to a report by the United States Department of Housing and Urban Development and the US Census Bureau, the total start of housing fell 9.5% in April to a seasonally adjusted annual rate of 1.57 million units.
The April reading of 1.57 million starts is the number of housing unit builders that would begin if development continued at this pace over the next 12 months. Within this total number, the number of single-family attacks decreased by 13.4% to a seasonally adjusted annual rate of 1.09 million. The multi-family sector, which includes apartment buildings and condos, grew 0.8% to a rate of 482,000.
“The start of housing and permits declined monthly in April as rising prices for wood and other building materials prices some home buyers from an otherwise hot housing market,” said Chuck Fowke, NAHB chairman. “Policy makers need to prioritize the US supply chain for items such as building materials to ensure builders can add the extra inventory the housing market so desperately needs.”
Robert Dietz, NAHB chief economist, added: “The decline in single-family permits indicates that builders are slowing construction activity as costs increase. While the start of housing was strong at the start of the year, some projects have now stalled due to homebuilders building homes to be sold for construction, higher costs and limited availability of building materials. “
Total permits rose 0.3% in April to 1.76 million units year-on-year. Single family permits decreased by 3.8% to a unit rate of 1.15 million. Multi-family permits were up 8.9% to a rate of 611,000.
Looking at regional permit data compared to the previous month, permits are 8.4% higher in the Northeast, 9.9% lower in the Midwest, 3.9% higher in the South and 4.1% lower in the West.
In terms of housing production, the number of single-family homes allowed but not started construction has continued to rise to 131,000 units in April. This is 47% higher than a year ago, as the cost of building materials is rising and delays in building some houses.