The slowdown in home construction at the end of 2016 is laying the groundwork for a rough spring for buyers.
According to Realtor.com, permits for new residences decreased 10.4 percent from October to November. The rate, not seasonally adjusted, was impacted by the cold weather and traditional lull during the holiday season. Permits declined 0.9 percent in November on a year-over-year basis.
“If we don’t have more permits being pulled for new homes, we’re going to start the spring buying season with possibly the lowest inventory of homes for sale that we’ve ever had,” says Realtor.com Chief Economist Jonathan Smoke. “With higher [mortgage] rates there’s a growing sense of urgency by buyers who had previously put off making the decision.”
Builders started construction on 28.4 percent fewer homes in November compared to October, and 7.9 percent fewer homes since November 2015. The share of homes completed in November, however, rose 4.1 percent from October and 24.2 percent from November 2015.
Advertisement
Related Stories
Market Data + Trends
Vacation and Investment Home Market Insights
A recent report finds beach homes to be the most sought-after vacation-home type and that the investment potential of a second home is an important factor in the purchasing decision
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable