US single-family Housing starts fall to 15-month low; building permits climb

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US single-family Housing starts fall to 15-month low; building permits climb

On Wednesday, US Commerce Department data had unveiled that US single-family housing starts, the most lucrative segment in US housebuilding industry, tumbled to the lowest level since August 2020 last month, though, volumes of US building permits climbed to a 15-year peak, illustrating an upsurge in construction backlogs amid a steep shortage of raw materials coupled with a tightening US labor market.

Nonetheless, the Commerce Department data released earlier in the day had underscored an increase in building permits in multi-family housing segment, while the number of houses which had received permits, but yet to start off constructions, had been jumped to a 15-year high in October, vindicating a sheer uncertainty among homebuilders in context of a lingering shortage of raw materials and labors as beforementioned.

The report, in tandem, had underpinned that the US homebuilding market, which had anchored the US economy alongside mega-cap tech giants during pandemic-induced restrictions last year, had been grappling with a chronic shortage of houses alongside a record rise in home prices.

US housing starts fall to lowest since August 2020

According to US Commerce Department data, US single-family housing starts had dipped 3.9 per cent to an annual rate of 1.039 million units on a seasonally adjusted basis last month, marking off a fourth straight month of decline that in effect had heaved US housing starts to the lowest level since August 2020.

Nonetheless, US multi-family housing starts rose 6.8 per cent, however, the gains would likely to have little or no impacts on US homebuilding market amid a chronic shortage of available houses. Apart from that, overall US building permits gained 4.0 per cent and building permits for US single-family homes added 2.7 per cent in October.

Meanwhile, as US homebuilding tumbled across all four regions in the world’s No 1 economy with Northeast, Midwest and West leading the tally of gains, citing a supply chain constrain alongside a flare-up in inflation indicators, a chief economist at FWDBONDS in New York, Christopher Rupkey said, “Residential housing construction activity continues to flounder.

There are zoning problems, higher land costs, a lack of labor, and inflation has inflated the cost of raw building materials.