These are the kinds of numbers that can make your heart skip a beat if you’re looking to buy a house. Groundbreaking on new homes was up about 4% in August and building permits were up 6%, according to the U.S. Census Bureau.
Dig in a little deeper, though, and you’ll see that most of those gains are in apartment construction. Single-family homes saw a decline in starts overall. But not everywhere.
When it comes to new homes, we can dust off that old maxim: Location, location, location.
Lennar, one of the country’s biggest builders, was expecting to deliver at least 15,800 homes last quarter but said Tuesday it came up 600 houses short, pointing fingers at supply chain issues.
In an earnings call, CEO Jon Jaffe rattled off a list of the biggest bottlenecks: “engineered wood, windows, garage doors, paint and vinyl siding.”
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Most buyers prefer doors and paint with their new homes. Some shortages are regional: There’s not enough brick and lumber in Texas, concrete block and insulation in Florida, and workers in Texas and Minnesota.
All that makes building slower and more expensive, said Robert Dietz, chief economist with the National Association of Home Builders.
“If you construct a basket of residential construction material goods, those prices are up about 20% year over year,” he said.
Lumber prices are down from their peak of about $1,500 per thousand board feet to more like $400, Dietz said. That should help in the coming months. Location matters in the pace of building, too.
“We’ve seen single-family homes starts increase in both the Northeast and the South. You know, builders are still finding creative ways to keep their pipelines moving,” said Kelly Mangold with RCLCO Real Estate Consulting.
Especially builders of multifamily housing — groundbreaking on buildings with at least five units was up more than 20% last month.
With a national shortage of at least a million units, any new housing is much-needed housing.