Yesterday, Fed Chair Powell started to mention the record number of housing units under construction, see: Fed Chair Powell: “Homebuyers need a bit of a reset”
“How much will it affect housing prices? Not really sure. Obviously, we are watching that quite carefully. You’d think over time … There is a tremendous amount of supply in the housing market of unfinished homes … and as those come online …”
And then he quickly changed direction. Perhaps he was concerned about spooking homebuyers about the coming increase in new supply.
The fourth graph shows housing starts under construction, Seasonally Adjusted (SA).
Red is single family units. Currently there are 822 thousand single family units under construction (SA). This matches last month as the highest level since November 2006. The reason there are so many homes is probably due to construction delays.
Blue is for 2+ units. Currently there are 843 thousand multi-family units under construction. This is the highest level since April 1974! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.
Combined, there are a record 1.665 million units under construction. This above the previous record of 1.628 million units that were under construction in 1973 (mostly apartments in 1973 for the baby boom generation).
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