The number of new homes under construction may not seem relevant to every buyer – especially those who aren’t in the market for a new home. But the rate of new residential construction matters, whether buyers know it or not. How? Well, the simple answer is more new homes means more for-sale inventory. And since a lack of homes for sale drives prices higher, more new home construction is a good way to moderate prices and offer buyers more options. In other words, home building helps bring better balance to the overall market. These days, though, builders are feeling hesitant. New numbers from the U.S. Census Bureau and the Department of Housing and Urban Development show permits for future construction have slowed, with single-family authorizations down almost 2 percent in August. That’s a sign builders are feeling cautious. But while permits have slowed, single-family housing starts – which measure how many new homes began construction last month – rose 7.6 percent, which means builders aren’t starting as many new projects, but they are working to finish projects already in the pipeline. (source)
