Once a new-home construction permit is secured, it typically takes about six to nine months to complete a residence
As if it weren’t bad enough already, the housing shortage is expected to get even worse. This prediction comes in light of a drop in the number of new-construction permits issued in June. The U.S. Department of Commerce’s monthly new residential construction report shows a 15.4 percent drop in the amount of permits issued for a total of 114,000.
However, as realtor.com reports, the good news is that this was actually a 5.8 percent increase from May. One of the major reasons builders are not building more, according to Jonathan Smoke, the Chief Economist at realtor.com, is because they are worried the number of buyers could plummet if the economy begins to flounder.
Because new homes are more expensive than existing homes, builders have more to lose if the economy stumbles and they are left with a number of newly constructed homes on their hands with no buyers.
In addition to the drop in permits for single-family homes, permits for condo and apartment buildings with five or more units experienced a year-over-year decrease of 39.2 percent and settled at 36,600 in June. As with single-family homes, however, that number was up almost 4.9 percent in May.
More good news is that June had the largest number of completed new residences over the past year. Year-over-year, the number of completed homes increased 16.5 percent to 99,500 residences. It also experienced a 19 percent month-over-month increase.