The single-family housing market continued to show signs of slowing in April as rising mortgage rates and ongoing supply chain disruptions continue to raise housing costs and take a toll on the housing market.
Home builders warn of current deteriorating conditions as a sharp jump in mortgage rates in March and April coupled with ongoing building material supply chain disruptions, labor shortages and high inflation drive up housing costs.
As the housing industry celebrates New Homes Month in April, millennials say their housing preferences have changed due to the COVID-19 pandemic. More than a third (36%) of millennials are now in favor of a larger home and home builders are responding to this trend.
Despite production bottlenecks and rising construction costs, total housing starts led by a strong multifamily reading posted a solid gain in February as demand stays strong and existing inventory remains at low levels.
Ongoing lumber and building material supply side constraints, rising construction costs and expectations of higher interest rates continue to negatively affect builder sentiment even as buyer demand remains relatively solid.
The National Association of Home Builders (NAHB) urged the Biden administration to increase domestic production of timber from federal lands and to work with Canada on a new softwood lumber agreement that will eliminate tariffs during a virtual White House listening session March 14 on resolving the lumber and building material supply chain crisis.