“We’re all going to pay the price for it in terms of higher construction costs,” said Alan Banks, president of the North Carolina Home Builders Association.
In addition, existing homeowners wishing to perform renovations will also feel the proverbial pain in their pockets. As such, they will seek ways to curb costs or even abandon plans for renovations altogether.
Despite the extended bull market in U.S. equities, real estate has still been lagging the rest of the capital markets.
“Although the number of permits is still higher than starts, pointing to more activity in coming months, the overall trend in housing has clearly slowed/plateaued/leveled off,” said Jennifer Lee, senior economist for BMO Capital Markets. “In other words, expect less support from residential construction for the broader economy.”
Despite the lower-than-expected housing starts, the National Association of Home Builders’ monthly confidence index did rise by 1 point to a total of 68 in the month of October. A reading that registers over 50 is a sign of improvement.
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