This monthly decline isn’t the first indication that the housing market is flagging. Construction has languished all year — with starts down 3.6% for the first seven months of the year compared to a year earlier.
Scarce land and high labor costs have plagued builders for much of the year, factors that have been exacerbated by unrelenting uncertainty in the global markets. This week’s flare-up, with bond markets flashing recession warnings, does not provide fertile ground for new housing investment.
Consumers stand ready to snap up new homes, particularly at the entry level, and mortgage rates are cooperating — but new construction is not. That could change, given the lift in July housing permits, which was higher than expected.