The latest housing starts report reveals a stagnation in construction levels, reminiscent of the COVID-19 pandemic era, largely due to elevated mortgage rates above 7%. Despite efforts from builders to manage these rates, the outlook remains gloomy, as builder confidence has seen a decline. New home sales, however, show some resilience compared to 2022, but significant growth has yet to manifest. Analysts suggest that a stable improvement is tied to mortgage rates nearing 6%, and real progress will be dependent on supportive monetary policies to spur growth in the housing market.
The current elevated mortgage rates are presenting challenges to further construction, hindering progress in housing starts despite builders' efforts to manage these rates.
We've had times when mortgage rates headed toward 6% to help sales from breaking below 2022 lows, keeping both sales and employment somewhat stable.
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