New Home Construction Flat in October as Builder Confidence Improves
According to U.S. News, the pace of new housing was mixed in October as the effects of Hurricane Milton weighed on building starts while permits for future homes were essentially unchanged from a month earlier.
Permits were at an annual rate of 1.416 million, down 0.6% from September’s revised 1.425 million, while starts fell 3.1% to 1.311 million.
The report from the Census Bureau comes as the housing industry is feeling more optimistic. The National Association of Homebuilders/Wells Fargo Index rose by three points in November as both confidence in current conditions and future expectations increased.
The index of current sales conditions rose two points to 49, while the expectations of sales in the next six months increased seven points to 64. Traffic of prospective buyers saw a three-point gain to 32.
New home construction has been a bright spot in the housing sector as builders have adjusted to the market with smaller homes, financing incentives and an assortment of options designed to appeal to first-time and repeat buyers.
Although mortgage rates dipped in late summer, they have risen in kind with other interest rates since then despite the Federal Reserve cutting rates in September. A stronger economy and some recent concerns about the possibility that President-elect Donald Trump’s economic proposals will be inflationary have boosted yields on the 10-year Treasury – an investment that often is used to price other borrowing costs.
