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Housing Starts Fall, Bottleneck to Economic Recovery-Manufactured Housing to the Rescue?

May 17th, 2017

Is the bottleneck bubbling just under the surface? Credit: The Economist.

New U.S. homebuilding numbers showed an unexpected drop in the month of April, dropping to their lowest level in the last five months.

According to Newsmax, persistent weakness in the construction of multi-family housing units, could suggest a slowdown in the housing market recovery.

The Commerce Department said that housing starts dropped 2.6 percent to a seasonally adjusted annual rate of 1.17 million units. April’s results follow a downwardly revised rate of 1.20 million units in March.

The single-family homebuilding market rose 0.4 percent to a pace of 835,000 units.

By region, single-family starts grew 19.4 percent in the Midwest and 9.1 percent in the West, while they fell 3.4 percent in the South and tumbled 29.2 percent in the Northeast.

Economists polled by Reuters believe that homebuilders are failing to take advantage of a chronic shortage of properties for sale amid complaints about expensive building materials and shortages of lots and labor.

Analysts also believe weather was a factor.


Credit: BMO Capital Markets.

Some of the drop in starts could be weather-related – parts of the United States experienced snowstorms in March and heavy rains in April,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

So Mother Nature had a hand in this. Looking ahead, there is room for growth.

National Association of Realtors chief economist Lawrence Yun sees the problems lasting longer.


Lawrence Yun. Credit: The Business Journals.

With housing starts declining in April, inventory shortages will continue for a longer period of time,” said Yun.

The intensifying housing shortage will push up home prices and rents, and easily above wage growth and the broad consumer price inflation. This continued, slow pace of construction of new homes is a major bottleneck to a faster economic and housing recovery.”

According to HousingWire, experts were not expecting the decrease in starts this month, and were actually waiting for an increase after the decline in March.


Credit: First American.

The lack of inventory of homes for sale is one of the most pressing challenges in the housing market today, and new homes are the source of supply that increases the total stock of housing to meet our nation’s growing demand,” said First American Financial chief economist Mark Fleming.



Manufactured Housing: The Answer, Hiding in Plain Sight 

The Daily Business News has covered the labor shortage in home construction extensively, and continues to show evidence that manufactured housing is a practical and affordable solution to provide quality homes at a competitive price.

And, even though manufactured and modular homebuilders can also feel the “pinch” at times, one of the numerous advantages of factory building is the ability to recruit and train team members who can work effectively in a production center environment.


John Bostick, president, Sunshine Homes, Red Bay, AL.

As John Bostick, owner and president of Sunshine Homes said in an interview this summer, “We have an almost unlimited capacity” to expand production.

For more on manufactured housing being the solution that’s hiding in plain sight, see MHProNews  and MHLivingNews Publisher L.A. “Tony” Kovach’s insight into the opportunity linked here. ##


(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)



RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.


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