The backlog plaguing housing construction doesn’t appear to be easing.
The number of homes authorized but unbuilt rose in October as broken supply chains continued to wreak havoc on the industry, according to the U.S. Census Bureau.
The number of approved, unconstructed homes was 45 percent higher than a year ago and 4.7 percent above September’s estimate. Overall, new-home permits in October increased 3.4 percent from last year and 4 percent from September.
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“The rising count of homes permitted but that have not yet started construction is a stark reminder to policymakers to fix the supply chain so that builders can access a steady source of lumber and other building materials to keep projects moving,” said National Association of Home Builders Chairman Chuck Fowke.
Material bottlenecks, rising costs and labor shortages are dragging on the construction industry nationwide.
In an October survey for the NAHB/Wells Fargo Housing Market Index, more than 55 percent of single-family builders reported a shortage of labor across 16 home-building trades, including framing crews, carpenters, plumbers and more.
The latest data show that homebuilders have not been able to take advantage of high demand and what some observers have called a nationwide shortage of dwellings by ramping up production:
- Overall housing starts fell 0.7 percent from September’s estimate and rose just 0.4 percent from last year, despite rising home prices. The number of homes completed remained the same as in September, but was 8.4 percent less than at this time last year.
- Single-family home completions were 1.7 percent below September’s revised seasonally adjusted rate, but 3.5 percent higher than at this time last year.
- Building permits for single-family homes were 2.7 percent above the revised September figure but down 6.3 percent from last year. Housing starts for single-family homes was 3.9 percent below the previous month’s rate and down 10.6 percent from a year ago.
“Single-family permit data has been roughly flat on a seasonally adjusted basis since June due to higher development and construction costs,” said NAHB chief economist Robert Dietz.
Homes with five or more units told a different story. Completions were up 4.1 percent from September’s estimates, but down 31.7 percent from a year ago.
Permits increased 6.5 percent from September and 34 percent from last October. Housing starts increased 6.8 percent from September but fell 39.5 percent from last year.
Despite supply challenges, NAHB builder confidence increased thanks to strong buyer demand. Confidence in the single-family home category increased three points to 83 in November, according to the NAHB/Wells Fargo Housing Market Index.