The U.S. housing market faces a challenging period as new government data reveals a decline in single-family homebuilding and permits for April 2024. This drop, influenced by rising mortgage rates, contrasts with an overall annual increase in housing starts. Despite the setbacks, the acute shortage of homes for sale continues to support new construction efforts. With a significant housing shortfall persisting, understanding these dynamics is crucial for homeowners navigating the current real estate landscape.
Check out this article from The World Property Journal that discusses the decline in single-family homebuilding. After reading the article, call me with any questions you may have or if you have any other real estate needs.
Tim Houterloot - Broker/Realtor
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Source: The World Property Journal | Reposted Houterloot 5/22/2024
New government data shows U.S. single-family homebuilding and permits fell in April 2024, amid a resurgence in mortgage rates, but new construction remains supported by an acute shortage of houses for sale.
Single-family housing starts, which account for the bulk of homebuilding, slipped 0.4% to a seasonally adjusted annual rate of 1.031 million units last month, reports the Commerce Department's Census Bureau.
Data for March 2024 was revised higher to show single-family starts falling to a rate of 1.035 million units instead of the previously reported 1.022 million units. Housing starts increased 17.7% year-on-year in April.
The average rate on the popular 30-year fixed mortgage pulled back from a five-month high of 7.22% to 7.09% last week, data from mortgage finance agency Freddie Mac showed, as easing labor market conditions put two rate cuts from the Federal Reserve this year back on the table.
The rise in mortgage rates over the course of April and the first week of May caused confidence among homebuilders to slump this month.
The nation is facing a severe housing shortage, which should keep new construction supported. Government data showed there were 728,000 housing units on the market in the first quarter, well below the 1.145 million units before the COVID-19 pandemic.
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