WASHINGTON (AP) – U.S. home building fell last month, led by a drop in apartment construction, while developers broke ground on more single family homes.
The construction of new houses and apartments declined 2.6 percent in January to a seasonally adjusted annual rate of 1.25 million, the Commerce Department said Thursday . The drop came after a much larger gain the previous month. Single family housing starts rose 1.9 percent while apartment building dropped 7.9 percent.
Even with the decline, new home construction has increased 10.5 percent in the past year. That gain has been fueled by rising demand for homes as more Americans are looking to buy.
Yet many potential buyers are frustrated by a lack of available properties. The supply of existing homes fell in December to its lowest level since 1999. That has pushed up prices as buyers have had to bid against each other.
Home builders have responded by ramping up construction, but the increases haven’t been fast enough to relieve supply shortages.