The home construction business in the US lost momentum in November due to rising interest rates. The number of new projects started fell by 0.5 percent to 1.427 million for the full year, the US Department of Commerce said.
In October it had even gone down by 2.1 percent to 1.434 million. At the same time, the number of building permits as an indicator of future building activity collapsed, by 11.2 percent to an annualized 1.342 million. The construction industry is struggling with the fact that mortgage loans are also becoming more expensive as the Fed increases interest rates. The sharply increased prices for wood and building materials are causing additional cost pressure for house builders.
The US Federal Reserve has recently combated escalating inflation with unusually large interest rate hikes. It recently raised the key interest rate by half a percentage point to the new range of 4.25 to 4.50 percent. Previously, she had made four major rate hikes in a row – by 0.75 percentage points each time.
