Last month saw decreases in both permits issued and housing starts, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development's joint report.
Housing starts were down 4.2 percent year-over-year, and fell 12.3 percent from May 2018 levels. Building permits were down 2.2 percent month-over-month, and 3 percent YOY. In the single-family sector, permits actually increased 0.8 percent from May, and 4.6 percent from June 2017, per the report. Realtor.com chief economist Danielle Hale said in a statement, "The market has a long way to go to get back to a normal level of [building]." Sam Khater, chief economist for government-sponsored enterprise Freddie Mac says that the widening gap between supply and demand continues to drive up home prices.
Bargain-hunters shouldn't get too excited over that slight increase in inventory, because new homes typically cost more than existing (previously lived in) homes. That's due to high land, labor, and material costs. The median cost of a newly constructed home was $313,000 in May, according to the most recent Census and HUD data available. That's 17 percent higher than the median price of an existing home, at $267,500, according to the most recent National Association of Realtors data.
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