In a sign that lower mortgage rates continue to boost the housing market, single-family production surpassed the million mark for the second straight month in December.

Builder confidence in the market for newly built single-family homes climbed seven points to 44 in January, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). 

Falling mortgage rates helped end a four-month decline in builder confidence, and recent economic data signal improving housing conditions heading into 2024.

Single-family construction surged in November as lower mortgage rates helped to assuage affordability concerns and unleash pent-up demand for housing.

Pending home sales dropped 1.5% in October, according to the National Association of Realtors. The Northeast posted a monthly gain in transactions while the Midwest, South and West all recorded losses.

Elevated mortgage rates that averaged 7.62% in October per Freddie Mac, the highest rate since 2000, depressed buyer demand and pushed down new home sales in October.

The findings were reported in the Q4 2023 Houzz U.S. Renovation Barometer, which racks residential renovation market expectations, project backlogs and recent activity among businesses in the U.S. construction sector and the architectural and design services sector.

Despite mortgage rates that are at a 23-year high, new home sales posted a double-digit percentage gain in September because of a lack of inventory in the resale market.

Despite elevated mortgage rates averaging above 7%, single-family starts posted a solid gain in September as more buyers are turning to new homes because of a dearth of inventory in the resale market.

Confidence in the market for new multifamily housing was in positive territory for the second quarter, according to results from the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB).