Builders Overwhelmed With Home Starts

Builders definitely have job security when it comes to homebuilding. The U.S. Housing Development and Commerce Department reported that housing starts rose 17.3 % to a seasonally adjusted rate of 1.19 million units. For single-family homes it increased 17.2% to a seasonally adjusted rate of 831,000 and multifamily homes rose 17.5% to a seasonally adjusted rate of 355,000.

Each region’s housing starts, both single-family and multi-family were broken down. Midwest was 0.2% higher than in the South and 20.9 % higher in the West. There was a decrease of 5.4% in the Northeast.

Housing starts are at 1.86 million which is up 2.1 % month-over-month, building permits are at 1.24 million with an increase of 17.3 % month-over-month and completions are at 1.22 million and has a 4.3% rise month-over-month. The breakdown for multi-family permits and single-family permits for each are as follows: housing starts for multi-family permits total 368,000 and single-family permits total 834,000, building permits for multi-family permits total 350,000 and multi-family permits total 831,000, and last are completions with 311,000 total multi-family permits and 830,000 single-family permits.

Dr. Lawrence Yun, Chief Economist, National Association of Realtors explains that homebuyers are racing into the market because of the low mortgage rates. He says the housing market is hot. Good news for the housing market but there is still a lack of inventory making it hard for buyers. Even though there is a gain in housing starts, it still is bare. Yun concludes that the U.S. needs at least 1.5 million housing starts.

“Fueled in part by record low mortgage rates, builders are seeing solid demand for housing despite the challenges of the virus and elevated unemployment. Demand is growing in lower density markets, including exurbs and small metros,” said Bill Bankfield, Vice President of Capital Markets, Quicken Loans.

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