Data out today from the Department of Commerce gives us our latest indication that the housing market may be slowing. Housing starts, a statistic that charts when construction begins on the foundation of a new building intended primarily for residential use, declined in June from the month before. Residential building permits also dropped last month.
All this is against a background of construction labor shortages and rising material costs to build houses. Homebuilders say they're still confident about the future. But what do these numbers tell us about where the housing market might be headed?
Chris Herbert, managing director for Harvard University’s Joint Center for Housing Studies, said builders are looking into long-term solutions, including apprenticeship programs to train workers, and developing manufacturing technology to reduce material costs. But in the short term?
“People who might want to make the transition to owning are going to have to wait longer to do that,” Herbert said.
So that means they may be spending more time as renters while the housing market stays tight.
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