Residential Construction Tanked In January Due To Apartment Downslide

Home construction lost ground in January, collapsing to the slowest pace in five months. Residential home construction fell to a 1.33 million annual pace, down from a revised 1.56 million in December, according to data from the U.S. Census Bureau. This is the biggest drop since April 2020, and a far cry from Wall Street expectations of 1.45 million. Single-family starts fared poorly, down by a 4.7% adjusted annual rate of 1.004 million units last month. But the driving factor was multifamily, which shrank by 35.6%, wiping out gains the month prior. On the bright side, permits once again rose, besting last month’s 5-month high. Permits offer an indication of future construction. Analysts partly attribute the inconsistency to severe winter…

Starts Slipped, Permits Surged In December

Home construction slipped for the first time in four months in December, with single-family starts taking a hit. Residential home construction fell 4.3% last month to a 1.46 million annualized rate, according to data from the U.S. Census Bureau. They were up 7.6% from December 2022’s rate of 1.36 million, however. The dip comes on the heels of a surge in November that sent new construction to a 6-month high. Notably, the decline was driven by single-family construction. Multi-family starts actually rose to a 5-month high. Permit applications also fared well after performing poorly the month prior. Single-family permits soared to their highest rate since May 2022, and multi-family also ticked up.  Permits offer an indication of future construction, suggesting…

Starts Surge To 6-Month High

Housing starts surged unexpectedly in November, rising to a 6-month high. New home construction increased by 14.8% last month to an annualized rate of 1.56 million, according to data from the U.S. Census Bureau. All regions saw increases, with the South experiencing a 16.3% boost while new construction doubled in the Northeast. Single-family starts soared by 18.0% to a seasonally adjusted annual rate of 1.143 million, their highest level since April 2022. Permit applications slipped 2.5%, however, to a seasonally adjusted annual rate of 1.46 million. Permits offer an indication of future construction. Notably, the decline was driven by multi-family construction only. Permits for single-family residences actually rose to their highest level since May 2022. The data offers good news…

Rates Fall 20 BPS To 7.03%

The 30-year fixed rate mortgage fell nearly 20 bps in one week, almost hitting 7%. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.03%, down from the week prior’s 7.22%. A year ago at this time, the 30-year FRM averaged 6.33%. It is now down nearly 80 bps in the last six weeks. The 15-year fixed rate fell to 6.29%% from 6.56%. A year ago, it averaged 5.67%. Mortgage applications overall increased by nearly 3% last week as refinances saw their biggest gains in two months thanks to cooling rates. But purchase demand reversed course, slipping slightly.  “When rates began to rapidly drop, purchase applications rebounded initially, but this improvement in demand diminished in the last…

Starts, Permits Saw Unexpected Gains In October

Housing starts surged unexpectedly in October, suggesting some relief for homebuyers grappling with tight inventory. Housing starts were up 1.9% last month to a 1.37 million annualized rate, their highest point in three months, according to data from the U.S. Census Bureau. Single-family starts rose a modest 0.2%, adding to a 3.2% month-over-month increase in September, though they remain down 10.6% from the start of 2023. Multifamily starts saw a 6.3% boost to an annualized 402,000 pace. Permits also increased by 1.1% to 1.49 million, a boon after slipping the month prior. Permits indicate how many homes will be built in the coming months. Single-family permits rose 0.5% to 968,000, their highest level since May 2022, while multifamily permits jumped…

Housing Starts Saw Surprise Uptick In September

Housing starts surged unexpectedly in September, suggesting some relief for homebuyers grappling with tight inventory. New U.S. home construction increased by 7% last month to an annualized rate of 1.36 million, resurfacing after an 11.3% drop in August, according to data from the U.S. Census Bureau. They rose in three of the four major regions, with just the Northeast seeing a decline. Multi-family starts in particular were up 17% after a slumping last month. Single-family starts also saw a boost, up 3.2% month-over-month. “The uptick in single-family production was somewhat unexpected as our latest builder surveys indicate that starts are likely to weaken in the months ahead due to recent higher mortgage rates that were near 7.6% in mid-October,” Alicia…

Housing Starts Tank, But Permits Offer Hope

Housing starts slipped in August as multifamily construction sank, though permits for single-family homes accelerated. New U.S. home construction fell by 11.3% last month, according to data from the U.S. Census Bureau, to an annualized rate of 1.28 million. Single-family starts were down 4.3% from July. Permits for new construction rose to their fastest pace in nearly a year, however, up 6.9% to 1.54 million. Permits offer an indication of how many homes will be built in the coming months. Permits for single-family homes in particular soared to their fastest pace since May 2022. This suggests that builders are optimistic about demand moving forward. But they’ve recently taken a hit from the high-rate environment, leading to depressed homebuilder sentiment. The…

New Homes Make Up Nearly One-Third Of The Market

As high rates keep sellers locked in their current homes, new homes are making up an increasing share of the market. Newly built homes made up almost a third of all single-family homes on the market in Q2 2023 (31.4%), according to a new report from Redfin. This is up 30.3% YOY and almost double the share from Q2 2019 (17%). It’s a new record for any second quarter in Redfin’s data, though not the highest share ever. In fact, it’s down from Q1 2023’s share of 33.6%, though Redfin notes the decline follows a normal seasonal trend of new home shares peaking in the winter. Though builders have slowed home construction, no longer producing the same inventory they did…

Builder Confidence Slips, Breaking Seven-Month Upward Streak

Builder confidence has dipped, breaking a seven-month streak of increases, as high rates and shelter inflation put a dent in new home demand. The National Association of Home Builders and Wells Fargo Housing Market Index, which tracks confidence in the new single-family home market, decreased by 6 points to a reading of 50. NAHB said that construction costs, lack of buildable lots, and ongoing shortages forced the reading down this month. “But while this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many homeowners elect to stay put because they are locked in at a low mortgage rate,” NAHB Chairman…

Housing Starts Sank In June, But Permits Offer A Glimmer Of Hope

Housing construction declined last month, but the future looks brighter thanks to a bump in permits. New U.S. home construction rose for the first time in six months, according to data from the U.S. Census Bureau. Residential starts fell by 8% to an annualized rate of 1.43 million. This is well below estimates from economists surveyed by Bloomberg, who expected a pace of 1.48 million. Permits for new construction also dipped, down 3.7%% to a rate of 1.44 million. Permits offer an indication of how many homes will be built in the coming months. But on the bright side, single-family construction permits in particular saw an increase, up 2.2% from May to the highest pace since June 2022. Builders continue…