After making gains in June, both the number of building permits issued and housing starts dropped during July, according to the Census Bureau.
Although the tight housing inventory across the country is driving prices upward, at least one economist said it’s also making it more difficult for some potential homebuyers, especially millennials looking to buy their first home.
The Census Bureau reported a seasonally adjusted annual rate (SAAR) of 1.223 million building permits in July 2017, down 4.1 percent compared with the revised June rate, but up 4.1 percent from one year ago.
Housing starts in July 2017 were at a SAAR of 1.155 million, down 4.8 percent from June 2016, and down 5.6 percent from July 2016.
“The number of existing homes listed for sale has been declining for over two years and the number of new homes added to the market has been insufficient to meet demand. Millennials are entering the housing market, but are confronted with very few entry-level homes to buy,” First American Chief Economist Mark Fleming said in a release.
“The pace of housing starts needs to increase significantly to meet demand and alleviate inventory challenges. Since 2009, the number of new households has increased by 5.9 million, while the net new number of housing units has only increased by 3.5 million, meaning there is a shortage of 2.4 million housing units in the United States.”