It’s no secret a lack of inventory is making an impact on the housing market, but new reports show hope for a change.
The U.S. Bureau of Labor Statistics and the U.S. Department of Housing and Urban development released its latest housing report showing that residential housing starts are on the rise at a 1.35 million pace, which is the highest they’ve been since 2007.
According to the report, housing starts increased 5 percent from April — the highest month-over-month growth since June 2007 — and 20.3 percent from May 2017. Inman reported the increase leaves experts hopeful the starts will lead to a larger inventory around the country.
“New home construction activity soared to its highest level in over a decade, which is fantastic news as more housing inventory will be available as the year proceeds,” said National Association of Realtors Chief Economist Lawrence Yun.
The report also stated that housing completions annually adjusted rate of 1,291,000 was 1.9 percent higher than the April estimate and 10.4 percent higher than the May 2017 rate.
Even though the report’s findings were overall good for the housing market, the building permit rate is a bit worrisome for inventory progress and future starts activity, according to MarketWatch.
Permits in May were at 1.3 million pace, dropping 4.6 percent from April. Nevertheless, permits are still 8 percent higher than May 2017.
According to Builder, single family authorizations also dropped 2.2 percent from April, but they’re still 7.7 percent higher than last May. Even though the authorizations decreased, single-family housing completions rose 11 percent.
“While the rise is good news, it’s still not enough for a hot real estate market that is starving for inventory during the peak summer sales season,” said Sam Khater, chief economist at Freddie Mac.