flexiblefullpage - default
Currently Reading

Higher Mortgage Rates Are Taking a Toll on New Construction

Advertisement
billboard - default
New-Construction Projects

Higher Mortgage Rates Are Taking a Toll on New Construction

Housing starts are falling as elevated interest rates chip away at buyer demand 


November 18, 2022
Wood-framed single-family house under construction
Image: Stock.adobe.com

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.

Read more

Related Stories

Home Design

The Share of New Homes With a Two-Story Foyer Declined in 2021

The trend of the two-story foyer is on the decline as builders and homebuyers seek out more efficient ways to save space in new-construction projects

Townhomes

Townhouse Construction Market Posts Strong Q3 Gains

The market share for townhouse construction is on the rise, and more strong gains are expected as prospective first-time buyers seek out medium-density residential neighborhoods

Financing

Builders and Developers Report Worsening Credit Conditions in Q3 2022

Credit on loans for Acquisition, Development & Construction (AD&C) was less available and more expensive in the third quarter of the year

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category




Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.