Building permits, an indicator of future construction, fell more than expected to the lowest since August.
There are several signs in the market for newly built homes that point to a potential slowdown for the nation’s homebuilders.
Data released Tuesday added to the evidence that builders are pulling back.
Single family housing starts continued to rise in June, many of those for homes already sold. But building permits, an indicator of future construction, fell more than expected last month to the lowest point since August and were about 100,000 units below the six-month average, according to the U.S. Census Bureau.
“The single family market in particular desperately needs more new homes, especially on the lower end where first-time home buyers need some price relief and more supply choices, but we also know that it is getting more and more difficult to deliver from a builder perspective at the wanted price points,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Elsewhere in the market, mortgage applications to purchase a newly built home dropped nearly 24% in June year over year, according to the Mortgage Bankers Association. That was the third consecutive month of decline.
“Homebuilders are encountering stronger headwinds of late, as severe price increases for key building materials, rising regulatory costs, and labor shortages impact their ability to raise production. This has dampened new home sales and quickened home-price growth,” said Joel Kan, an MBA economist.
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