On Tuesday, US Commerce Department said that the US homebuilding dropped more-than-anticipated last month as sharp upswing in prices of lumber and other raw materials kept homebuilders on their toes, however, housing construction still remains supported due to a chronic shortage of existing homes for sales.
In factuality, the broad-based decline in US homebuilding last month was largely centred on single-family housing market segment with the number of houses, which were authorized for construction but had not been started yet, jumping to their highest since 1999, pointing towards a latest cohort of buyers’ hesitancy amid a sharp shoot-up in the costs of raw materials alongside labours.
US Housing Starts fall 9.5 per cent in April
Aside from that, according to US Commerce Department data released earlier in the day, US Housing Starts were slumped 9.5 per cent to a seasonally adjusted annualized rate of 1.569 million units last month, while Housing Starts data for March was revised lower to 1.73 million units, still marked up the strongest since June 2006.
However, on an annualized basis, US Housing Starts rose 67.3 per cent in April compared to the same time a year earlier, while US building permits rose 0.3 per cent following a gain of 1.7 per cent in March. Meanwhile, referring to a wide-spread supply chain constrains backpedalling the gains in US housing market which appeared to have hauled the US economy alongside mega-cap tech conglomerates during the pandemic-led restrictions last year, a chief economist at the Mortgage Bankers Association in Washington, Mike Fratantoni said, “Builders are delaying starting new construction because of the marked increase in costs for lumber and other inputs.
These supply-chain constraints are holding back a housing market that should otherwise be picking up speed, given the strong demand for buying fuelled by an improving job market and low mortgage rates. ”