The latest Census report illustrates a troubling trend for homebuilders as new home sales might have increased, but they're grappling with increasing inventory, making growth challenging.
Monthly new home sales have stagnated for two years now. This stagnation alongside rising mortgage rates is causing a concerning atmosphere for builders, pushing housing starts to recession levels.
As buyers face escalating mortgage rates, the current demand lacks momentum; with construction labor facing potential job losses in 2025, we are nearing a critical juncture for the housing market.
Historical data indicates that when housing permits decline alongside starts, job losses in residential construction typically follow; this persistent trend raises alarm about the likelihood of an impending recession.
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