Where Are We Going?

Economic Update: Hot Housing Market Not Without Challenges

The housing industry has been on fire since the six-week shutdown last year due to the pandemic. New home sales surges 20.4% from the prior year, with the median sales price only increasing 2.9%. This year, new home sales are up 33.7% over the same period in 2020. In April, the median sales price for new homes was up 10.5% over the median sales price for 2020. Builders have been artificially holding back on sales because of huge backlogs, the escalating cost of materials, material and labor availability, and concers regarding depletions of their developed lot supply. On May 7, lumber futures for May delivery were $1,645 per 1,000 board feet. The year-over-year increase since May of 2020 was 374%.

During 2020, total housing starts increased 6.9% over 2019, with single-family starts up 11.6% and multifamily starts registering a 3.3% loss of activity. Year-to-date total housing starts are up 20.6% over the same period in 2020, with single-family housing starts increasing 28.0% and multifamily starts gaining 5.7%. Total housing starts in April were down 9.5% from March, with a 13.4% drop in single-family starts and a 4.0% increase in multifamily starts.

Presented by:
Charles C. Shinn, Jr., Ph.D.
President, Builder Partnerships / The Shinn Group

Updated: July 31, 2021

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