New home construction in the United States declined in January for the fifth month
Homebuilding in the United States fell again in January, marking five straight months of decline, despite lower mortgage interest rates, lower inflation, lower administrative fees for lenders, and some perks for those looking to buy. the purchase.
Housing starts, a measure of new home construction, fell 4.5% in January from December and 21.4% from January of a year ago, according to data released Thursday by the Census Bureau. January beginnings fell to an annualized level of 1.31 million, down from December’s estimate of 1.37 million.
Housing starts fell sharply in May and July last year, when rising mortgage rates drove many potential homebuyers out of the market, before bouncing back in August, and falling back since.
Single-family home construction that began in January declined 4.3% from December’s revised figure.
The average interest rate applicable to 30-year fixed mortgage loans fell to 6.12% last week, according to data from US government mortgage facilitator Freddie Mac, but it is still much higher than it was just a year ago, when it was Rates hover around 3.69%.
And with US inflation showing signs of abating, moving away from its highest levels in more than four decades, during the fourth quarter of last year, interest rates applied to mortgage loans fell, as real estate developers felt more optimistic about what it would be like in 2023.
But the jobs report, which showed huge additions to jobs in January, and the consumer and producer prices reports, which were released this week, together confirm that fears of continuing high inflation are justified, and that interest rates, including those applied to mortgage loans, may It stabilizes for longer periods, at levels higher than previously expected, which may increase the slowdown in housing activity in America, after years of unprecedented recovery.
Building permits granted, which tracks the number of new housing units, rose slightly in January, up 0.1% from December, but fell 27.3% from a year ago, amounting to 1.339 million.
Applications for mortgage loans have also risen 28% since early November, according to Redfin, a real estate broker.
The median price of an existing home sold in December was $372.7,000, up 2% from the same period last year, according to a report released last week by the National Association of Realtors. This marks the 130th consecutive month of year-on-year home price increases, the longest streak ever recorded.
Relatedly, confidence among builders in the US housing market rose more-than-expected in February, as recent declines in mortgage rates helped stem growing buyer demand.
The National Association of Home Builders Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, rose 7 points to 42, the highest reading since September and the biggest one-month gain since June 2013.
While any reading of the index above 50 is positive; The measure did not enter the negative territory before 2022, since 2012, with the exception of a short decline, although it was sharp, in May 2020, in one of the worst periods witnessed by all markets, in the wake of the emergence and spread of the Covid-19 epidemic in America and most parts of the earth.
The index is about half where it was just a month ago, when it was at 81, although it has risen from a low of 31. The index peaked at a 35-year high of 90 in November 2020. , supported by a record low interest rate at the time.