The April report on single-family housing reveals year-over-year declines across all major construction stages, including permits and completions. With the South driving most of this reduction, factors such as high inventory levels and affordability issues contribute to the slowdown. The National Association of Home Builders reported a sharp drop in builder sentiment, with the Housing Market Index reaching its lowest since December 2022. Despite new-home sales remaining relatively strong, concerns about tariffs, mortgage rates at 6.9%, and economic uncertainties may challenge future growth in the sector.
Year-over-year declines occurred at every stage of construction, including single-family permits, starts, under construction, and completions, showcasing significant downturns in the housing market.
The slower pace of single-family permits suggests reduced groundbreaking in upcoming months due to higher inventory levels and ongoing challenges with costs and affordability.
The lack of production corresponds with the NAHB/Wells Fargo Housing Market Index, which measures homebuilder sentiment and reflects waning optimism in the market.
Despite challenges in the broader housing market, new-home sales have remained a relative bright spot; however, builders' negative sentiment on economic conditions could jeopardize this.
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