US home building falls as developers start fewer apartments
New home, apartment construction falls in January after notching up gains in December
US home building fell last month, led by a drop in apartment construction, while developers broke ground on more single family homes.
The construction of new houses and apartments declined 2.6 per cent in January to a seasonally adjusted annual rate of 1.25 million, the Commerce Department said Thursday. The drop came after a much larger gain the previous month. Single family housing starts rose 1.9 per cent while apartment building dropped 7.9 per cent.
Even with the decline, new home construction has increased 10.5 per cent in the past year. That gain has been fueled by rising demand for homes as more Americans are looking to buy.
Yet many potential buyers are frustrated by a lack of available properties. The supply of existing homes fell in December to its lowest level since 1999. That has pushed up prices as buyers have had to bid against each other.
Home builders have responded by ramping up construction, but the increases haven’t been fast enough to relieve supply shortages.
Rising prices, a tight supply of homes and higher mortgage rates combined to slow sales of existing homes in December, when they fell 2.8 per cent.