MADISON — The latest new home construction numbers have showed a dramatic slowdown in the number of permits pulled, signifying a significant decrease in the number of new home starts.

The data, submitted by all municipalities across the state, shows 2,450 permits were pulled between July 1 and Sept. 30 of this year, 44% less than the 4,382 permits pulled in quarter two. Permits were up 38% in the first half of 2021 compared to the same period in 2020, however at the end of the third quarter, year-to-date permits are up just 6% compared to 2020 numbers.

“Numbers in the first half of this year were great despite the increased building prices at that time, but we’re now starting to see the effect that peak building material prices have had on the industry,” said Wisconsin Builders Association (WBA) Executive Director Brad Boycks. “Many homeowners decided against signing contracts over the summer while they waited for prices to come down.”

Material prices and supply chain delays have greatly impacted homebuilding. At its peak, the cost of lumber added $36,000 to the cost of an average-sized new home, while prices of steel mill products, resins, windows, door frames, copper pipe and tube and other necessary building materials have all increased 30%.

“Remodeling projects have been up with people making changes to their existing homes to avoid the overall costs that building a new home presented over the summer,” said WBA President Abe Degnan. “With the supply chain issues we’re currently experiencing; remodeling and new home construction alike are going to continue to feel the pressure.”

“Our production staff is spending more time scheduling, rescheduling and resourcing our materials for current projects. This coupled with low lot inventory and a leveled-off existing home market are huge factors when it comes to the inability to lock in new building contracts,” said David Belman of Belman Homes, Inc.