New home construction picked up in the US following the end of the last recession, but as the following chart illustrates, starts and new construction have clearly moderated in recent months.
Low inventory and high prices have slowed down the entire housing market, which is mostly made up of previously owned homes. Existing-home sales fell for the sixth straight month in September to their lowest level in over two years.
This has left many regional housing markets with a persistent lack of housing supply, both in the for-sale market as well as in the tight rental market.
In fact, the rental vacancy rate is at its lowest level since the early 1990s. The US rental vacancy rate is currently 7%, which is far below the last peak vacancy rate of 11%.
The crackdown on immigration as well as tariffs on imported lumber has made it more difficult and expensive for builders to obtain the labor and materials to construct homes. That is especially true in hot urban markets, where land is expensive, and zoning can be restrictive.
The US Rental Market Is Tightening
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