Housing starts rose 9.8% in June, driven by the continued upswing in apartment construction (up 28.6%, and remaining volatile).
Single-family construction remained fairly flat (down 0.9%) by comparison. That said, builders are clearly expecting a steady increase in starts in the next 12 to 24 months, based upon the investments that are being made in land and lots. Single-family lot development is up 21.5% compared with a year ago, based on Metrostudy’s latest national research.
Part of the reason the number of single-family housing starts (a measure of production, not demand) is sluggish is the depletion of lot supplies in many of the most coveted locations around the country. The supply of new homes is still barely keeping up with demand. Finished new-home inventory is still at 2.5 months of supply, which is in the historically normal range, but somewhat low for a market that is starting to revive rapidly. This explains the high rate of price increases on new homes. As mentioned, builders and developers are pushing hard right now to get more home sites ready for construction in the months ahead.
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