If you’re a prospective home buyer worried about affordability, you should also be worried about the rate of new home construction. Why? Well, because the number of new homes that are built helps determine how quickly home prices rise or fall. In simple terms, the housing market is a balance of supply and demand and short supply drives prices higher. That’s been the case for most of the past 10 years. That’s why new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development are encouraging. The numbers show both permits to build new homes and housing starts – which measure how many new homes began construction during the month – were rising at the end of last year. The numbers were delayed due to last year’s government shutdown but show month-over-month numbers up significantly in December. But while monthly numbers showed improvement, new home construction was slower than year-before levels, with housing starts 7.3 percent lower than they were in December 2024. (source)
