Yun notes that the homes-for-sale inventory in March was still essentially at an all-time low with less than a million homes on the market.
"Builders are responding to higher mortgage rates and are chasing rising rents, with fewer homebuyers and more renters being forced to renew their leases," Yun explains. "Even before the rise in interest rates, apartment vacancy rates were at historic lows and rents were accelerating. Some degree of a return to the office is also fueling back-to-city living where high rises are concentrated."
The latest residential construction report arrives as home builders ask for more assistance in regard to improving housing affordability.
Earlier this week, The White House released its "Housing Supply Action Plan," which is designed to ease high housing costs by increasing the supply of quality housing throughout the nation over the next five years.
Also, the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Index fell eight points to 69 this month. The index measures builder confidence in the market for newly-built single-family homes.
Rising mortgage rates in March and April combined with ongoing building material supply chain disruptions, labor shortages, and high inflation continues to inflate housing costs.