The U.S. Census Bureau and the Department of Housing and Urban Development’s most recent residential construction report shows the number of single-family homes that began construction in March was 14.2 percent lower than the month before. The decline, mostly due to economic uncertainty amid rising material costs, brought starts to their lowest level since last summer. But while the number of houses that began construction was down from the month before, the number of single-family homes that were completed rose 1 percent. Also, permits to build new homes increased 1.6 percent – though the improvement was more due to multi-family construction than single-family homes, which slid 2 percent. What does this mean for home buyers? Well, it depends. In areas where the inventory of homes for sale has rebounded, slower new home construction will have less effect than it will in areas in need of available homes for sale. Where inventory lags, fewer new homes could lead to increased competition and pressure on prices. (source)
