As realtor.com reports, anyone who has been continuously frustrated by the lack of homes for sale or is tired of seeing a home that was listed in their price range jump above their budget because of the persistence of bidding wars, that frustration appears as though it is going to continue for some time. The number of newly constructed homes fell 5.8 percent year-over-year in April to a total of 72,600. In March, the number of newly constructed homes was down 6.4 percent. While these numbers are not seasonally adjusted, they certainly aren’t good news for a housing market desperate for new stock.
Even with a 15.7 percent increase in the number of homes under construction in April 2016 compared to April 2015, it will likely have the same effect of an eyedropper filling the Grand Canyon on the limited inventory of homes for sale, according to realtor.com’s chief economist, Jonathan Smoke.
Particularly alarming is the fact that the number of permits issued to erect new multifamily residences has dropped. With very low vacancies already being experienced, rents will likely increase even further.
The South and the West led the way in terms of the amount of building permits issued. In fact, almost half of the new construction permits for single and multifamily dwellings issued were in the Southern portion of the nation. The Midwest was third and the Northeast was fourth in terms of permits issued.
While there are some underlying signs of inventory beginning to increase, for most people, especially anyone looking to purchase a home at the entry-level, it may take longer than they would like.