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  • Saturday, 24 February 2024
Housing market: After months of decline, single-family construction rose in February

Housing market: After months of decline, single-family construction rose in February

The U.S. housing market has seen a resurgence in the number of single-family homes being built in February, after months of decline due to supply chain disruptions and labor shortages. According to data released by the Commerce Department, construction of single-family homes rose by 4.2% in February, beating analysts' expectations.

This comes as good news for potential homebuyers who have been facing a severe shortage of inventory, which has driven up home prices to record levels in many parts of the country. However, the increase in construction is not expected to immediately alleviate the tight housing market, as it may take several months for the new homes to be completed and listed for sale.

The rise in single-family home construction was driven primarily by a 22.5% increase in the Northeast, while the Midwest saw a 3.3% increase. However, the South and West both saw declines in single-family home construction, with decreases of 2.2% and 0.5%, respectively.

Overall, housing starts, which include both single-family and multi-family homes, increased by 6.3% in February, with a total of 1.64 million units being started. This also beat analysts' expectations, but it was driven largely by a 17.1% increase in multi-family construction.

Despite the increase in construction, homebuilders continue to face challenges in the form of rising material costs, labor shortages, and supply chain disruptions. Lumber prices, for example, have skyrocketed in recent months, causing many builders to delay projects or pass on the added costs to homebuyers.

The increase in housing starts and single-family home construction is a positive sign for the U.S. economy, as the housing market is a key driver of economic growth. However, it remains to be seen whether the trend will continue in the coming months, as builders grapple with ongoing challenges.

In addition to the challenges faced by builders, potential homebuyers also face affordability issues, as home prices continue to rise and mortgage rates have begun to creep up. This could put a damper on demand for new homes, which could in turn impact construction levels in the future.

 

The U.S. housing market has seen a resurgence in the number of single-family homes being built in February, after months of decline due to supply chain disruptions and labor shortages. According to data released by the Commerce Department, construction of single-family homes rose by 4.2% in February, beating analysts' expectations.

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