America’s Housing Shortage Just Got Worse
Single-family housing starts fell to the lowest level in more than three years last month, as builders’ confidence remains muted.
America's housing shortage has worsened as homebuilders scale back construction, according to recent data. Single-family housing starts, the largest share of homebuilding in the nation, fell 9.9% in July to 808,000 units, the lowest rate in over three and a half years. Total new home starts, including multifamily homes, dropped 12.4% to 1.239 million.
Rising mortgage rates, now at 6.67% as of the week ending August 13, have deterred buyers and led to mounting unsold inventory. The median sale price for all housing types in the U.S. rose to $434,100, up 2% from the previous year. Homebuilders face a paradox: the nation has a severe housing shortage, particularly for starter homes, but there is also a large stock of unsold properties on the market.
The 21st Century ROAD to Housing Act was passed to boost housing construction, but builders are hesitant to build due to economic and geopolitical uncertainty, high mortgage rates, and rising material costs. Despite a slight increase in overall permits for new homes in July, the homebuilding market remains weak, with builder confidence remaining muted.
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