Construction of U.S. homes has picked up less than expected in May, as very expensive wood and the scarcity of other materials have continued to limit the ability of builders to exploit an acute shortage of homes on the market.
The U.S. Department of Commerce’s report on Wednesday also showed permits for future construction of houses to fall to a seven-month low. Housing compliance has also declined as the number of homes authorized for construction but not yet started has gone to its highest level since 1999, indicating that supply is likely to remain tight for some time and increase inflation. house prices.
“The lack of materials and maneuverability has builders struggling to increase production from new homes, even if demand remains strong,” said Robert Frick, corporate economist at the Navy Federal Credit Union in Vienna, Virginia. “Potential home buyers will have to wait for tight inventories and rising prices for new and existing homes for the foreseeable future.”
Initial housing prices increased 3.6 percent at a staggered annual rate of 1.572 million units last month. Data for April have been revised up a percentage of 1,517 million units from the 1,569 million units previously reported.
Revolutionary activity is growing in the densely populated Midwest, West and South, but is falling in the Northeast.
Economists polled by the Reuters news agency had forecast growth at a rate of 1.630 billion units. Last month’s increase was still below the March rate of 1,725 million units, which was the highest level since June 2006. Building starts, however, jumped 50.3 percent over an annual basis in May.
Although timber prices fell from a record high in early May, whitewood lumber prices rose 154.3 percent year-on-year in May, according to the latest data from the producers.
A survey by the National Association of Home Builders (NAHB) on Tuesday showed confidence in single-family home builders as low as 10 months in June.
The NAHB blamed the reflection on sentiment on “higher costs and decreased availability for softwood lumber and other construction materials,” announcing that it was raising the prices of new homes “which slowed the strong pace of house construction ”.
Tariffs on steel imports also add to construction costs.
U.S. stocks opened lower as investors waited for suggestions from the Federal Reserve on when to begin refining their massive bond-buying program. The dollar was firm against a basket of currencies. U.S. Treasury prices have risen.
Larger and more expensive housing demand amid the COVID-19 pandemic, which has left millions of Americans still working from home, leading to a boom in the housing market. But supply is tight, with inventories of prime properties near record lows.
Permits for future domestic construction fell 3.0 percent at a rate of 1.681 million units in May. Building permits have increased by 34.9 percent compared to May 2020. They were up slightly in advance at the start, suggesting moderate gains in home construction in the coming months.
The single-family home, the largest share of the housing market, rose 4.2 percent at a rate of 1,098 million units in May.
Building permits for single-family homes fell 1.6 percent at a rate of 1,130 million units. The number of housing units authorized to be built but not started increased 0.8 per cent at a rate of 238,000 at the end of May, the highest since the government began tracing the series in January 1999.
The real estate market has been the protagonist of the economic recovery since the COVID-19 recession, which began in February 2020. Investment in residential construction has enjoyed double-digit growth since the third quarter of last year. Most economists expect that housing will have a neutral impact on gross domestic product growth in the second quarter.
Initiatives for the multi-family volatile segment increased 2.4 percent to a unit rate of 474,000 in May. Building permits for multi-family housing projects fell 5.8 percent to a rate of 551,000 units. With millions of Americans vaccinated against COVID-19 and the reopening of the economy, people are back in town.
Housing total fell 4.1 percent to a rate of 1.368 million units last month. Complaints from single-family homes fell 2.6 percent to a rate of 978,000 units.
Real estate agents estimate that the start of single-family housing and completion rates should be in the range of 1.5 million to 1.6 million units per month to close the inventory gap.
The stock of homes under construction increased 0.5 percent at a rate of 1.324 million units last month.