This brings the numbers up to a seasonally adjusted rate of 1.5 million, the highest since February. Single-family starts rose 8.2 percent to a seasonally adjusted annual rate of 940,000 while multifamily starts rose 58.4 percent to 556,000.
“Strong builder confidence and heavy buyer traffic point to further production gains in the near term, but the more than 110 percent jump in lumber prices since mid-April is adding approximately $14,000 to the cost of each new single-family home,” said Chuck Fowke, chairman of the National Association of Home Builders, in a press statement.
Building permits rose 18.8 percent to a 1.50 million units — a 17 percent rise for single-family permits and a 22.5 percent rise for multifamily permits. The numbers show that, among a pandemic and an ultra-competitive market, there is a large demand for newly constructed housing.
“The year-over-year increase in permits, starts, and completions indicates that builders are eagerly responding to record low mortgage rates, a limited supply of existing homes for sale, and sturdy demand driven by millennials aging into homeownership, but rising material costs may dampen that momentum in the months to come,” First American Deputy Chief Economist Odeta Kushi said in a prepared statement.
Regionally, housing starts rose 9.3 percent in the Northeast, 5.9 percent in the Midwest, 5.2 percent in the South and 1.4 percent in the West compared to a year ago.
“This is the strongest pace of housing starts in the pandemic era,” Holden Lewis, home and mortgage expert at NerdWallet, said in a prepared statement. “We need a strong pace of housing starts like this because there’s tremendous pent-up demand for homes. When these homes are completed, some of the buyers will sell affordable homes to first-time buyers.”