Housing Starts eased from August to September, as the small increase in single-family home building was outweighed by a decline in multi-family projects. We saw a similar pattern in Building Permits, which are the forward-looking indicator for new home inventory. Single-family completions also declined for the month, which will not help on the inventory front.
What’s the bottom line? While builders are feeling more confident about the future, new home construction is still not keeping up with demand. This limited new supply relative to household growth should continue to support home prices.