Although new home sales showed an increase recently, builders remain reluctant to expand housing permits or starts due to the current 7% mortgage rates. The housing construction cycle peaked in 2022, with current activity levels mimicking those seen during the early COVID-19 recession. While large builders may sustain profit margins, the rising inventory in the resale market complicates further home construction. Additionally, increased supply of completed homes for sale and existing backlogs challenges builders' outlook for obtaining new housing permits, igniting concern over future growth.
Even with an uptick in new home sales, builders remain hesitant to increase permits or starts due to prevailing 7% mortgage rates.
The housing construction cycle peaked in 2022, and unless mortgage rates decline, builders are unlikely to ramp up activity.
Despite new home sales reaching a multi-year high, builder confidence is near levels seen during the early pandemic, particularly among smaller builders.
The rising supply of completed units and backlog poses challenges for builders in maintaining optimism about obtaining new housing permits.
Collection
[
|
...
]