Single-Family Homes Are Being Built at the Highest Rate Since the Recession
Low mortgage rates and solid wage growth have contributed to a steady rise in home production.
October was another steady month for the residential construction industry. According to data from the United States Commerce Department, builders started construction on new homes at a pace of 1.31 million in the month of October, which was up 3.8 percent from September and up 8.5 percent from the same time in 2018.
Notably, starts on single-family homes rose 2 percent overall, marking the fifth month in a row that mark has increased.
“Led by lower mortgage rates, the pace of single-family permits has been increasing since April, and the rate of single-family starts has grown since May,” said Robert Dietz, chief economist for the National Association of Home Builders. “Solid wage growth, healthy employment gains and an increase in household formations are also contributing to the steady rise in home production.”
Total housing permits also rose from September to October, climbing 5 percent. The rate of permits being issued rose in every region of the country.
“Home builders are seeing more building opportunities as market conditions remain solid,” said Greg Ugalde, chairman of the NAHB. “Builder sentiment remains strong, and we are seeing an uptick in buyer traffic.”
According to the latest NAHB Housing Market Index, which gauges builder perceptions of current single-family home sales and sales expectations for the next six months, builder confidence has remained steady, only dropping a single point from October to November.
“The issuance of more housing permits is a very positive sign and a good step toward more inventory,” said Lawrence Yun, chief economist for the National Association of Realtors. “In order to better counter and even slow the increase in housing prices, home builders will have to bring additional homes on the market.”
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