Housing market continues to soften

On a regional and year-to-date basis, combined single-family and multifamily starts are 17.3% higher in the Northeast, 6.6% higher in the Midwest, 11.2% higher in the South and 7.5% higher in the West, the NAHB reported. Overall permits increased 0.4% to a 1.87-million unit annualized rate in March. Single-family permits decreased 4.8% to a 1.15-million unit rate. Multifamily permits increased 10.0%, to an annualized 726,000 pace, according to the study.

The lackluster numbers are due to the same challenges that have been plaguing builders for some time now.

Kushi said: “Builders continue to face supply chain disruptions that have pushed prices for building materials higher, as well as a shortage of skilled labor, materials, and lots that make it difficult to increase the pace of construction.”

Then there’s the affordability issue: “In addition to supply chain disruptions, builders are growing concerned about declining affordability,” Kushi observed. “In February 2022 , the average 30-year, fixed mortgage rate stood at 3.8% and now it’s above 5%. The increase in rates since February has reduced consumer house-buying power by $60,000.”