Home builders slowed construction of single-family homes more than expected in April as inflation pushed up costs and rising mortgage rates made homes cheaper.
Census data on Wednesday opened new horizons for single-family home construction at a seasonally adjusted annual rate of 1.1 million in April, according to data from the Census Bureau. .
The February and March figures changed significantly. Single family launches fell from 1,221 million to 1,213 million in February. Single family launches rose from 1.2 million to 1.87 million in March.
The April number was 8.3 percent lower than the March number before the revision and about 10 percent below the February provisional number. This shows how much construction has slowed in the last few months.
It is most sensitive to individual domestic market interest rates. Traditional 30-year fixed mortgage rates rose sharply in April, rising from 4.67% at the end of March to 5.412% at the end of April. Since then, rates have continued to rise and are now at 5.25 percent. High mortgage rates, combined with high prices, have made it impossible for some families in the US, especially children and first-time buyers, to purchase homes.
Total starts fell 0.2 percent to 1,724 million from 1,728 million which was revised downwards. Economists estimate 1,765 million after the initial report of 1,793 million in March.
The March issue came as a surprise, according to estimates of 1.75 million. After the analysis, it seems that the launches in March were actually lower than expected.
In April, apartment construction increased by 16.8% compared to March. This part of the housing market is considered to be less sensitive to mortgage rates. Compared to last year, the number of apartments increased by 42.3 percent.
Permits, a leading indicator of the future of residential construction, have fallen sharply. Total leaves fell 3.2 percent, single-family leaves 4.6 percent and multi-family leaves 0.6 percent from March.
On Tuesday, the National Home Contractors Association reported that home builder confidence fell to its lowest level since June 2020.
Inflation in building materials prices, shortages of some materials, a tight job market and rising interest rates have hit home builders, making them cheaper for buyers.
Source: Breitbart
