Construction of new homes slowed in March, with Housing Starts falling nearly 1% from February. Building Permits, which are indicative of future supply, also fell 8.8% for the month. While Starts and Permits for single-family homes both ticked higher from February to March, they were significantly lower than in March of last year.

What’s the bottom line? The housing sector is undersupplied, and not enough inventory is heading to the market. Starts for single-family homes have been on a downward trend over the last year, with the pace of 1.191 million units in March 2022 falling all the way to 861,000 units this March. Single-family permits have followed the same pattern, declining from a pace of 1.163 million units to 818,000 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.