Not only are there significantly fewer houses being sold in the US during the financial ruin of the coronavirus pandemic, but new homebuilding has also come to a near stand still.
According to the latest data released by the Commerce Department, new housing starts have dropped by 30.2%, which translates to only 891,000 units for the month of April – the lowest level since 2015. Therefore, on a year-over-year basis, new homebuilding has declined by approximately 29.7%.
Despite homebuilding falling under the essential category in many states, the industry still suffered declines due to disruptions further up the material supply chain. In closer detail, the construction of single-family homes dropped by 25.4% in April, meanwhile multi-family home construction fell by 40.5%.
Although the country is beginning to ease restrictions across many states, it may be awhile before the housing construction industry is back to pre-pandemic levels. Even with homebuilder confidence increasing, the US unemployment numbers are still in the millions, with many consumers running out of savings in order to persevere through the worst recession since the Second World War.
Information for this briefing was found via the Financial Post, Zero Hedge, and the US Department of Commerce. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.