While the United States housing market remains tight, it has proven to be a boon for the construction sector as the number of new homes being built rose by 21.7% last month from where it was in April.

According to a survey by the National Association of Home Builders (NAHB) whose results were released on Monday, June 19th, the current lack of available homes in the housing market has had a positive impact on home building. Indeed, these findings were backed by the Census Bureau’s own survey as of Tuesday, June 20th, that housing starts which measure the number of new home construction projects went beyond the projected decline for May 2023.

Meanwhile, the number of single-family homes also went up last month, closing May at 1.631 million and well above the 1.4 million previously forecast. Likewise, the number of new building permits also rose last month by 5.2% following a slump experienced from March through April.

Six Months of Positive Growth

Based on the most recent figures from the NAHB / Wells Fargo Housing Market Index, builder confidence has risen considerably this month, marking the sixth consecutive month that this has occurred , as well as the first time that builder sentiment has gone beyond the 50-point mark in nearly at year.

NAHB chief economist Robert Dietz added that the end of the US Federal Reserve’s interest rate hikes may also be a boon for market conditions moving forward with regard to mortgages as well as the financing of both builder and developer loans. 

Dietz remarked that the Fed as well as government policymakers need to note the role that the home building sector will play a key role with regard to both inflation and monetary policy in the coming months.