Home builders

Homebuilders held back by supply chain struggles

Builders saw a drop in the number of new homes they were able to start in January, due to material supply bottlenecks that slowed construction pipelines.

Housing starts fell 4.1% in the month to a seasonally adjusted rate of 1.64 million units, according to a Commerce Department report Last week. However, building permits have been granted at a brisk pace, meaning buyer demand remains higher than ever.

Splintered, single-family home starts fell 5.6% last month while the multi-family sector — which includes apartments and condos — fell 0.8%.

“The market needs more housing, but chronic production bottlenecks, including continued price increases for lumber and oriented strand board, continue to drive up housing costs and hurt the economy. housing affordability,” said Jerry Konter, president of the National Association of Home Builders. “In fact, the number of single-family homes under construction continues to increase as construction times increase due to delayed delivery of building materials.”

Single-family and multi-family housing starts combined saw the largest month-over-month declines in January in the Midwest, plunging nearly 38%, followed by a 2% drop in the South. Housing starts, meanwhile, rose slightly by 17.7% in the West and 2.6% in the Northeast.

Housing permits, a guarantee of future construction, remained high. Single-family permits in January rose nearly 7%.

“Rising permits, along with strong builder sentiment as measured in recent monthly surveys, suggest a positive start to the year given the recent rise in mortgage rates,” said NAHB Chief Economist Robert Dietz. . “Fueled by rising mortgage rates and construction costs, declining housing affordability will continue to affect the residential construction market in 2022.”