Construction of new homes ticked higher in April, with Housing Starts rising 2.2% from March. However, Building Permits, which are indicative of future supply, fell 1.5% for the month. While Starts and Permits for single-family homes rose from March to April, they were both significantly lower than in April of last year.

What’s the bottom line? While NAHB Chair Alicia Huey noted that “single-family starts are showing gradual improvement from the beginning of the year,” the housing sector is undersupplied and not enough inventory is heading to the market. Starts for single-family homes have declined from a pace of 1.176 million units in April 2022 to 846,000 units this April. Single-family permits have followed the same pattern, declining from 1.085 million units to 855,000 over the same period. With single-family homes remaining in high demand among buyers, the imbalance between supply and demand should continue to be supportive of prices.