The number of single-family home constructions in the U.S. fell in October, with new home supply at its lowest level since 2008
The number of single-family home constructions in the United States fell sharply by 6.9% in October, with an annualized rate dropping to 970,000 units, the lowest level since 2008. Although building permits saw a slight increase, the rebound may be limited due to the impact of hurricanes and rising mortgage rates. After the Federal Reserve cut interest rates, mortgage rates initially declined, but have since risen due to strong economic data and policy concerns. The homebuilder confidence index rose to a seven-month high, mainly due to expectations of reduced regulations from the Republican Party
According to the Zhitong Finance APP, due to hurricanes "Helen" and "Milton" suppressing related activities in the southern United States, and despite a slight increase in building permits, the number of single-family home constructions in the U.S. saw a significant decline in October due to rising mortgage rates, indicating that a rebound may be constrained.
The U.S. Department of Commerce reported on Tuesday that the number of single-family home starts, which account for the bulk of housing construction, fell by 6.9% last month, with the seasonally adjusted annual rate dropping to 970,000 units. The data for September was revised upward, showing that the number of housing constructions increased from the previously reported 1.027 million units to 1.042 million units.
After being impacted by rising mortgage rates in the spring, new home construction has shown some recovery. However, its momentum is limited by various factors, such as the current low supply of new homes in the U.S. since 2008, the impact of hurricanes in the southeastern U.S., and persistently high borrowing costs.
As the Federal Reserve began cutting interest rates in September, mortgage rates initially declined. However, given the strong economic data and concerns that President-elect Trump's policies (including tariffs on imported goods and large-scale deportations of immigrants) may reignite inflation, mortgage rates have erased previous declines.
The yield on the U.S. 10-year benchmark Treasury bond has risen to a five-and-a-half-month high and remains close to that level. Mortgage rates move in line with the yield on 10-year Treasury bonds.
Although a survey released by the National Association of Home Builders on Monday showed that the builder confidence index rose to a seven-month high in November, this was mainly due to builders "increasingly believing that the Republican Party will significantly ease regulatory pressures on the industry after gaining full control in Washington."