Data released on Wednesday showed an increase in Housing Starts of 3.6% during May. Analysts at Wells Fargo, builders continue to push through the headwinds of soaring building material costs and supply chain constraints in order to meet robust demand for single-family homes, townhomes and apartments.
“New residential construction continues to pick up. Total housing starts rose 3.6% to a 1.572 million-unit pace during May. In recent months, housing starts have come down off the highs seen earlier in the year. However, builders continue to push through the headwinds of soaring building material costs and supply chain constraints in order to meet robust demand for single-family homes, townhomes, condos and apartments. On a year-to-date basis, housing starts are running 25.1% above prior year levels.”
“Builders are trying their best to bring new supply to the single-family market, which is still experiencing a shortfall of homes for sale. Single-family starts rose 4.2% to 1.098 million-unit pace during the month. Low mortgage rates, increased space needs and a rising wave of first-time home buyers continue to fuel strong demand for new single-family homes, but inventories of homes for sale remain exceptionally tight.”
“New residential construction remains strong, but building material pricing and availability are likely to remain significant headwinds.”