Despite surging demand among buyers for new homes, housing starts slumped 12 percent in January from December due, in part, to the scarcity of lumber, rising costs of building materials, and disruptions in supply due in part to wildfires and heavy weather, industry analysts said.
Partly as a result, the number of new homes permitted in December but not started rose 9.6 percent from the month before and 28 percent year on year, Robert Dietz, chief economist for the National Association of Home Builders, said to the Wall Street Journal.
Higher costs of building materials will also drive new home prices higher in the months ahead. (See our new article, “PRICES OF BUILDING MATERIALS REACH RECORD HIGHS.”)
Sales of previously owned homes edged up 0.6 percent in January from December, notching a 23.7-percent jump year over year during the traditionally slow winter sales season.
The median selling price of existing homes climbed 14.1 percent in January from a year earlier, settling at $303,900.
The yearly gain resulted from surging demand for homes, driven by low-interest rates, home-office workers leaving urban centers, and a general shortage of homes available for sale.
TREND FORECAST: With remote work schedules, rising crime in big cities pushing more people to suburbs and ex-burbs, the cost of building new homes becoming more costly and with fewer than three months of supply of homes on the market, the lowest on record since the turn of the century,” according to Zillow, we forecast rising home prices in select areas of the nation.
When interest rates rise and when the equity markets plunge, so, too, will the over-priced housing market.
