As rising mortgage rates continued to quell homebuyer demand and force builders to scale back their plans, U.S. housing starts fell 4.2% in October to an annual pace of 1.43 million from 1.49 million in September. Mortgage rates have yet to peak as the Fed continues its rate-hike campaign meant to slow inflation, and in the meantime, new-construction projects are being placed on hold.
Single-family home construction fell 6.1% to an annual rate of 855,000 in October, housing starts dropped 9% year-over-year, and permits are down 10% on an annual basis, Realtor.com reports.
The highest mortgage rates in several decades have stifled new construction and are likely to do so through the next year or longer. The rate on a 30-year fixed mortgage recently topped 7%, more than double the rate a year ago.
While the U.S. has an acute need for more housing, fewer people can now afford to buy a home. Home prices are starting to come off record highs, but not by much.
Advertisement
Related Stories
Housing Markets
Florida Is Now the Second Most Valuable US Real Estate Market
Housing markets such as Florida are seeing substantial growth driven by an uptick in new construction
New-Construction Projects
St. Paul to Receive 1,000 Energy-Efficient, Affordable Housing Units
A new housing development on the site of a former golf course is bringing 1,000 affordable, energy-efficient units to St. Paul, Minn.
New-Construction Projects
How Elevated Mortgage Rates Are Affecting Housing Starts
While home builder confidence fell to a five-month low in September, persistent buyer demand could accelerate new-home construction in the months ahead
