What happened: Housing starts and permits fell back in June, following strong May numbers.
What Zillow Senior Economist Nicole Bachaud thinks: While homebuilders are remaining confident in the market with overall sentiment increasing again in June, the new construction market remains a rocky landscape. Increasing costs and labor shortages are still impacting builders’ ability to meet the demand for new housing. While completions are still higher than a year ago, housing permits and starts are dropping back from both this time last year and from last month. This decline may be a response to the slight drop in homebuilder sentiment regarding single-family sales in the next six months with mortgage rates staying elevated, despite headline gains to sentiment. Amid uncertainty, future building activity is pulling back – but is still remaining elevated from pre-pandemic levels. This comes at a time when existing homeowners are unwilling or unable to sell, severely shrinking the available pool of homes, making new home inventory even more important to buyers who are desperate