In January, single-family housing starts dropped 8.4% from the previous month, reaching an annualized rate of 993,000, marking a 1.8% decline from a year ago. Total housing starts, including multifamily units, fell 9.8% to 1,366,000. Builders are showing caution amid high construction costs caused by potential tariffs and elevated mortgage rates, which are nearing 7%. Homebuilder sentiment has also suffered, hitting a five-month low despite a national housing shortage, leading to a cautious approach among builders in the current market.
"Builders are exercising caution in January 2025, responding to the overall slow home sales market of 2024, in which fewer existing homes were sold than in any year since 1996."
"High construction costs, elevated mortgage rates and challenging housing affordability conditions are causing builders to approach the market with caution."
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