Rising lumber costs slowing new construction

According to data from the U.S. Housing and Urban Development and the Census Bureau, single-family and multifamily housing starts dropped by 10.3 percent last month. Single-family starts declined 8.5 percent in February for a seasonally-adjusted rate of 1.04 million while multifamily starts were down 15 percent to a rate of 381,000.

While demand remains strong and existing inventory low, the construction industry is beset by shortages of lumber and other building materials – including appliances – which is slowing new building projects.

Analysts predict new home construction will decline further in the near future as housing permits fell approximately 10 percent in February.

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