Home builders now face some tough decisions. Rising rates are sure to reduce home-buyer demand, but the short supply of homes for sale means that competition will likely remain elevated.
The numbers: U.S. home builders started construction on homes at a seasonally-adjusted annual rate of roughly 1.79 million in March, representing a 0.3% increase from the upwardly-revised figures for the previous month, the U.S. Census Bureau reported Tuesday. Compared with March 2021, housing starts were up nearly 4%.
What happened: Single-family starts and permits declined compared with both the previous month and March of last year. Every region saw declines in these figures between February and March, aside from the Midwest where new single-family construction rose 7%. The big picture: Over the past two years, burgeoning demand among home buyers has met with a shortage of some 5.8 million homes according to estimates from Realtor.com. That’s been a recipe for rising home prices.