October housing starts fell to 1.31 million units annually, with single-family starts down 6.9% but up 9.3% year-to-date. Despite rising mortgage rates, builders remain positive about 2025's outlook, anticipating regulatory improvements and Federal Reserve interest rate cuts to boost construction activity.
Builder confidence increased to 46 in November, marking the third consecutive monthly gain. While optimism grows over potential Republican regulatory relief, challenges persist, including labor shortages, lot availability, and elevated material prices. Price cuts remained steady at 31% of builders, with average reductions of 5%.
Approximately 90% of metro markets (196 out of 226, or 87%) registered home price gains in the third quarter of 2024, as the 30-year fixed mortgage rate ranged from 6.08% to 6.95%, according to the National Association of Realtors’ latest quarterly report.
Confidence in the market for new multifamily housing showed mixed results year-over-year in the third quarter, according to results from the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB).
With the Federal Reserve beginning an easing of monetary policy and builder sentiment improving, single-family starts posted a modest gain in September while multifamily construction continued to weaken because of tight financing and an ongoing rise in completed apartments.
Builder sentiment for new single-family homes increased in October, despite ongoing affordability challenges. The National Association of Home Builders reports optimism for 2025 market conditions, with builders anticipating easing inflation and moderating mortgage rates. The upcoming election remains a key factor in housing policy outlook.
High interest rates for construction and development loans as well as ongoing challenges regarding labor shortages and higher prices for many building materials continued to slow the building market this summer.
Existing-home sales fell in June as the median sales price climbed to the highest price ever recorded for the second consecutive month, according to the National Association of Realtors. All four major U.S. regions posted sales declines.
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