Homebuilders have been busy this summer—and that might make the home-buying search better for many Americans on the prowl for the place of their dreams.
Builders received 7.4% more permits to put up new homes in June compared with May, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. That’s a 5.1% increase over June 2016.
After a dip in May, that brought the number of new abodes on the horizon up to 1,254,000. That’s in line with the number of permits granted in the previous 12 months. (Realtor.com® looked at only the seasonally adjusted numbers in the report. These have been smoothed out to account for seasonal fluctuations.)
It’s a sign of more new homes to come, and will likely help ease the inventory shortfalls in many areas.
“That’s good news in that we’ve halted the decline in the number of new housing permits. That means more homes will be constructed in the future,” says Senior Economist Joseph Kirchner of realtor.com. But he warns against irrational exuberance. Even with the increases, “we really should be seeing almost double the number of permits to keep up with demand,” he adds.
The biggest monthly bump was in apartment and condo buildings with five or more units. Permits surged 14.6% from May, but were down 2.4% from June 2016. Single-family home permits rose 4.1% from May and 9.2% from June of the previous year.
Builders also bumped up construction on the number of homes started but not yet completed. Housing starts rose 8.3% from May and 2.1% from the same month a year ago.
In a boon to buyers trying to close before the summer ends (and the kiddies go back to school), about 1,203,000 homes were finished in June, according to the report. That was up 5.2% from May and 8.1% from June 2016.
It’s worth noting that new homes, which often come with the latest finishes and appliances, aren’t cheap. The median price of a newly built home hit a new high of $345,800 in May, according to the most recent Census and HUD data. That’s nearly 37% more than an existing home that’s previously been lived in. Existing homes went for a median $252,800 in May, according to the most recent National Association of Realtors® data available.
The newest homes were for sale in the South. However, those 535,000 new residences represented an 11.3% drop from the previous month and a 4.6% dip from the previous year.
The West was next, with 343,000 new homes—18.7% more than in May and a whopping 40.6% more than in June 2016. It was followed by the Midwest, at 210,000. That was up an astounding 42.9% month over month and 13.5% year over year. About 115,000 new homes were completed in the Northeast, up 9.5% from May, but down 6.5% from the same month last year.
“With rising population and steady job gains, drastically more new home construction is needed to fully and satisfactorily house new households that will be formed this year and upcoming years,” Lawrence Yun, the NAR’s chief economist, said in a statement. “More consistent gains are needed to help rebalance the housing market.”
This article originally appeared on Realtor.com