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Buyers dreaming of a owning a brand-new, three- or four-bedroom house in the leafy suburbs with a lawn out back may be out of luck. There won’t be as many newly constructed, single-family homes as expected this summer.
Builders obtained about 1,354,000 permits in March to put up new homes, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. That’s up 2.5% from February and 7.5% from March 2017. Permits are a good indication of how many new homes will be erected in the coming months.
However, they secured only about 840,000 permits for single-family homes, those suburban staples. After a ramp up in permits over the past few months, that’s down 5.5% from February.
That’s still a 1.7% increase from the same month a year earlier.
(Realtor.com® looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to account for seasonal fluctuations.)
“It’s a slight step back for single-family construction,” says Chief Economist Danielle Hale of realtor.com. “Builders are building more homes, but it’s still not enough.”
However, there was a surge in permits issued for condo and apartment buildings with five or more units. It jumped a hefty 22.9% from February and 19.1% from the same month a year earlier, to reach 473,000.
Housing starts, which is construction that’s begun but not finished, were also up 1.9% from February and 10.9% from March 2017.
Meanwhile, the number of newly completed homes hit 1,217,000 in March. That’s a 5.1% decrease from the prior month and a 1.9% increase from a year earlier.
“Homes are for sale, but there aren’t enough,” says Hale. But “it’s still better than where we were a year ago.”
New homes are typically significantly more expensive than existing homes, which have previously been lived in. That’s because land, labor, and material costs are rising and all the latest appliances and finishes don’t come cheap.
The median price of a newly constructed home was $326,800 in February, according to the most recent HUD and Census data. That’s compared with a median $241,700 for an existing home in February, according to the most recent data from the National Association of Realtors®.
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