The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S. Commerce Department’s October report on residential construction:
“Housing starts soaring past the 1.3 million mark for the first time since 2007 is big and welcoming news. The choke point of the housing market growth potential has been the lack of supply. The consequent tight inventory conditions has been pushing up home values to rise at faster rate than income growth over the past four years. This in turn has hurt affordability and contributed to the homeownership rate dipping to a 50-year low.
Now that supply is improving, future price growth should taper a bit. There is no oversupply threat and even more construction is still needed to help relieve housing shortage. Let’s hope the rising construction activity continues.” – Lawrence Yun, NAR chief economist