US Commerce Department said in a statement on Wednesday that US homebuilding had fallen short of expectations last month, signaling an unrelenting supply chain disruption, narratives in which had compounded further due to a persistent inflationary pressure.
Although, US Commerce Department report on US homebuilding had been the latest sign of a growing price-pressure that seemingly had continued to constrain housing market in Q3, 2021, building permits had revealed a surprise rebound following three straight months of decline.
On top of that, the report had shown a deep depression in multi-family houses Starts amid a chronic shortage of available properties, however, the plunges were relatively less penetrating for single-family houses. More importantly, the number of houses that had received building permits, but had yet to start construction, had perked up to the third-largest on record last month, illustrating a growing tentativeness on whether to take on newer projects amid a simmering price-pressure outlook.
Meanwhile, addressing to a record drop in US homebuilding lately in the wake of a wary increase in inflation indicators alongside a jump in lumber prices, a senior economist at Wells Fargo in Charlotte, North Carolina, Mark Vitner said, “There is no question that home building has hit some sort of near-term ceiling, with surging home prices reducing affordability and leading to a record drop in the proportion of consumers that feel now is a good time to buy a home”.
US homebuilding stumbles in July
According to US Commerce Department data, US housing starts took a tattering header of 7.0 per cent to a seasonally adjusted 1.534 million units on an annualized basis last month, while homebuilding fell across the country but the most populous southern part.
Nevertheless, on a monthly basis, starts of US single-family houses tumbled 4.5 per cent to an annual rate of 1.111 million unit, while US housing starts for multi-family houses nosedived as much as 13.1 per cent to an annual rate of 423,000 units.
Surprisingly, building permits rose 2.6 per cent on an average, as single-family houses’ building permits, the most lucrative item in US real estate industry, dipped 1.7 per cent.