Housing permits to build homes were down in October at just 97,900, a 9.1% drop from September, says Realtor.com's Clare Trapasso. But, that's only a 1.4% drop from October of last year, so economists aren't worried. Builders started the month of October by completing 97,100 homes and beginning work on 114,9000 new homes—a 21.2% jump from September and a 26.4% rise from the same month a year prior.
“This means there will be more homes for sale, giving buyers more options,” says Joe Kirchner, senior economist at realtor.com.
It could also bring down prices a bit—or so predicts the law of supply and demand. As more homes go up for sale, this could lead to fewer bidding wars and offers over asking price.
The dearth of residences on the market “has been pushing up home values to rise at a faster rate than income growth over the past four years,” Lawrence Yun, chief economist of the National Association of Realtors, said in a statement. “This, in turn, has hurt affordability and contributed to the home-ownership rate dipping to a 50-year low.”
“Now that supply is improving, future price growth should taper a bit,” he continued. “Let’s hope the rising construction activity continues.”