Inventory is already low, and it doesn't look like the crunch will let up any time soon, says Realtor.com's Clare Trapasso. The number of permits issued to builders to put up sorely needed homes across the country fell 6.2% from January to February, according to the latest new construction report released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
The drop in permits is “a real concern,” says realtor.com’s Senior Economist Joe Kirchner. “In six months to a year from now we’ll see the completion of new homes go down. That means there will be fewer homes on the market to buy and it will be more difficult for home buyers.”
Permits for single-family homes rose 3.1% in February over the previous month, according to the report. They were also up an encouraging 13.5% over the same month in the previous year. But going forward, the Midwest is the only region where a spike in home building is likely. Monthly permits were up 25.4%, and they rose 32.8% annually. That likely means builders in the region are about to get pretty busy. They were down both on a monthly and annual basis in the rest of the country—except in the South where they rose 2.5% annually in February.