US Single-Family Housing Starts Surge in November
Single-family home construction in the U.S. experienced a substantial increase in November and may continue to gather momentum, as the likelihood of decreasing mortgage rates is expected to attract potential buyers back to the housing market.
According to Reuters, permits for future construction of single-family homes increased 0.7% to a pace of 976,000 units last month.
The rate on the popular 30-year fixed mortgage averaged 6.95% last week, the lowest level since August, from 7.03% in the prior week, according to data from mortgage finance agency Freddie Mac. It has tumbled from a 23-year high of 7.79% in late October, tracking the decline in U.S. Treasury yields.
The Federal Reserve held interest rates steady last week and signaled in that the historic tightening of monetary policy engineered over the last two years is at an end and lower borrowing costs are coming in 2024.
A survey on Monday showed confidence among single-family builders rebounded from an 11-month low in December. The National Association of Home Builders noted that “many builders continue to reduce home prices to boost sales.”
Starts for housing projects with five units or more rose 8.9% to a rate of 404,000 units in November. Activity is, however, moderating as builders work through a large stock of apartment buildings under construction.
