The numbers: Construction of new houses fell slightly in April for the third month in a row, suggesting that rising mortgage rates, record home prices and the high cost of building materials are starting to bite.
Housing starts dipped 0.2 % to an annual pace of 1.72 million last month. That’s how many homes would be built in 2022 if construction took place at same rate over the entire year as it did in April.
Economists polled by MarketWatch had expected housing starts to register a 1.75 million rate after adjusting for the typical seasonal swings in demand.
The number of permits, meanwhile, slipped 3.2% to a 1.82 million rate.
Permits foreshadow how many houses are likely to be built in the months ahead assuming a stable economy.
Big picture: It’s been the same old story before and after the onset of the pandemic. There’s just not enough housing to go around.
Rising mortgage rates and high prices are likely to reduce demand, but lots of people still want to buy their own homes. There’s just little evidence to suggest builders can or will sharply boost construction.