Homebuilding slows as materials shortages linger
Permits for future construction plunged 7.7% in September
Supply shortages to be ‘major problem’ for housing if not fixed soon: NAHB CEO
National Association of Home Builders CEO Jerry Howard on consumer sentiment and how supply issues are impacting builders in the housing industry.
Homebuilding slowed in September as the ongoing materials shortage continued to drive up construction costs.
Housing starts fell 1.6% last month to a seasonally adjusted annualized rate of 1.555 million, the Commerce Department said Tuesday. Analysts surveyed by Refinitiv were expecting 1.62 million starts.
Permits for future construction plunged 7.7% to 1.589 million, missing the 1.68 million that was anticipated.
Supply chain disruptions that have occurred in the wake of the pandemic have left builders scrambling to find materials. The shortages have resulted in higher costs, causing many builders to delay projects.
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Despite the shortages, the National Association of Home Builders said in a report released Monday that builder confidence unexpectedly rose four points in October to a three-month high of 80. Any reading above 80 signals strong demand.
"Policymakers must focus on fixing the broken supply chain," said NAHB chief economist Robert Dietz. "This will spur more construction and help ease upward pressure on home prices."