More homes are being built, but how long will that last?

From Marketplace, I'm Sabri Benicior, Infra-David Broncaccio, construction of new homes increased

in July, according to new data out this week from the Commerce Department, housing starts

rose nearly 4% from June, and nearly 6% from the year before.

Generally speaking, more supply is welcome news to home buyers, but there are signs that

the trend might not last much longer.

Marketplace's Henry App has more.

Yes, builders are breaking ground on more new homes right now, but further up the housing

pipeline, it's a different story.

That's because permits for new homes rose just a tenth of a percent in July, and were

down 13% compared to last year, meaning fewer homes will have paperwork in place to break

ground in the coming months.

A decline in permits for multi-family housing projects is a big factor here.

Lots of those are already under construction right now, and interest rates are now expected

to remain higher for longer raising costs for developers.

Barrowing costs could start to weigh down the number of new single-family homes, too.

Mortgage rates rose to nearly 7% earlier this month, that's a level that, until last

year, hadn't been seen since 2002.

If more home buyers decide the cost of a mortgage is too high, that could influence

how many new units home builders decide to add to the country's housing stock.

I'm Henry App for Marketplace.

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