We’ve all heard of the Rolling Stones and Mick Jagger. I don’t know if you have to be a person of a certain age, a fan of the Rolling Stones, or just hip and wise beyond your years. But if you don’t automatically start singing (the lyrics you think you know) when ‘Start Me Up!’ comes on, are you really part of the fabric of humanity? That’s debatable, depending on your circle of friends and your ability to stick your tongue out and wear skinny pants on stage. Okay, that might be a bit too far.
What connected me to immediately to Mick Jagger was the reporting I read on both the census website, as well as www.tradingeconomics.com. Vitally important to your ability to make homeowners’ dreams come true is the supply of homes. A subset of that supply is new construction. And according to both of those sources I noted above, new construction [housing] starts are lagging in 2022. Before we go too far, according to www.Investopedia.com (clever name), housing starts are defined as, “the start of construction on a new residential housing unit.” For your purposes, just have an image of a single-family home in mind as you take in this article.
“Privately‐owned housing starts in June were at a seasonally adjusted annual rate of 1,559,000,” per www.census.gov. “This is 2.0 percent (±9.0 percent)* below the revised May estimate of 1,591,000 and is 6.3 percent (±10.2 percent)* below the June 2021 rate of 1,664,000.” They used a lot of words to tell us what we already know: new homes are hard to come by. Those were the latest stats through June of this year. And it doesn’t look like that trend is going to reverse itself in the very near future.
As in ‘when will housing starts begin to tick upward?’… That is actually very much up in the air. It’s a waiting game, honestly, and there are a number of factors that we just can’t influence. It’s a long game, to be sure. “Housing starts in the US dropped 2% month-over-month to an annualized rate of 1.559 million units in June of 2022, the lowest since September last year.” Will the recent passing of legislation tied to the Inflation Reduction act be impactful? Will there be a sense of economic improvement that makes its way to housing, ultimately impacting the market, supply & demand, and mortgage rates? We’ll see.
Although I’m fairly certain there is subtext in Mick Jagger’s lyrics that isn’t suitable for all audiences, one thing he writes (with respect to the real estate market in 2022) rings absolutely true: “You make a grown man cry.”