A dip in housing starts last month will continue to choke off much needed inventory. According to the U.S. Department of Commerce, housing starts nationwide fell seven percent in July compared to the prior month. Builders remain concerned about rising costs, material shortages and delayed approval for lot development.
Single-family construction fell by four percent and multifamily by 13 percent last month. Permits secured by builders who have yet to break ground are piling up. As of July, the number of builders sitting on permits but not starting projects was the third-highest ever recorded.
While home builders second guess their building projects, buyers are demanding new homes.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.00 percent.
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