{"id":5202,"date":"2024-04-17T00:26:30","date_gmt":"2024-04-17T00:26:30","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/17\/new-home-construction-in-march-plunges-unexpectedly-in-troubling-sign-for-homebuyers\/"},"modified":"2024-04-17T00:26:30","modified_gmt":"2024-04-17T00:26:30","slug":"new-home-construction-in-march-plunges-unexpectedly-in-troubling-sign-for-homebuyers","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/17\/new-home-construction-in-march-plunges-unexpectedly-in-troubling-sign-for-homebuyers\/","title":{"rendered":"New-Home Construction in March Plunges Unexpectedly in Troubling Sign for Homebuyers"},"content":{"rendered":"

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George Rose\/Getty Images<\/p>\n

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Construction on new homes declined unexpectedly last month, in a troubling sign for homebuyers already grappling with a dearth of homes for sale.<\/p>\n

Housing starts in March dropped 14.7% from February to a seasonally adjusted annual rate of 1.321 million, according to data released<\/a> Tuesday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. They were down 4.3% year over year.<\/p>\n

It marked the largest monthly percentage decline since April 2020, during the onset of the COVID-19 pandemic. The March figures were also the lowest total seen since August of last year.<\/p>\n

The new-construction decline, which was larger than economists forecasted, could signal trouble for homebuyers. With the number of homes on the resale market remaining tight, newly built homes have provided a crucial housing boost for buyers.<\/p>\n

\u201cAfter an impressive February, this month\u2019s new residential construction data falls more in line with previous months\u2019 trends,\u201d\u00a0 Realtor.com\u00ae Senior Economic Data Analyst Hannah Jones<\/strong> said in a statement.\u00a0\u201cMore for-sale and for-rent inventory will be key in easing rent and price growth in today\u2019s\u00a0under-supplied market<\/a>, especially as existing homeowners find today\u2019s market relatively inhospitable for a home sale due to high prices and mortgage rates.\u201d<\/p>\n

Within total housing starts, single-family starts fell 12.4% from February. However, starts were up 21.2% year over year in March.<\/p>\n

Single-family permits, a sign of future construction, also dropped 5.7% from February. That was the first monthly decline in nearly two years. They were up 17.4% year over year.<\/p>\n

Multifamily starts also dropped 20.8% in March from the prior month. That continued a downward trend for multifamily construction over the past year. Cooling rents and the sheer number of other projects that have been completed recently or are still in the pipeline<\/a> have dented developer appetite for new condo, co-op, and rental projects.<\/p>\n

\u201cLooking ahead, we still think single-family starts stand to benefit from the lack of second-hand homes on the market, shifting demand to newbuilds,\u201d said Capital Economics Property Economist Thomas Ryan<\/strong> in a note. \u201cBut that strength will be offset by weakness in multi-family starts, which we expect will remain around current levels, leaving total housing starts little higher than they currently are by the end of this year.\u201d<\/p>\n\n

Housing starts fall in every region but the West<\/h2>\n

Monthly housing starts fell in March in the Northeast, Midwest, and South, but climbed 7.1% in the West and were up 48.1% year over year.<\/p>\n

“Housing starts surged in the West in March, posting strong gains after an anemic 2023,” said Bright MLS Chief Economist Lisa Sturtevant<\/strong> in a statement. “This increase in new construction in the western region is a good sign for home shoppers there who have faced high prices and limited inventory,”<\/p>\n

On a monthly basis, total housing starts declined 36% in the Northeast, 23% in the Midwest, and 17.8% in the South last month. Annually, starts were down in these regions, except for the Midwest where they were up 18% year over year.<\/p>\n

Builders blame higher interest rates, inflation<\/h2>\n

Homebuilders say they face financing constraints on construction projects, as higher interest rates increase the cost of borrowing for both builders and buyers.<\/p>\n

\u201cBuilders are grappling on several fronts as the inflation fight continues,\u201d said Carl Harris<\/strong>, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, KS<\/a>. \u201cHigher interest rates are increasing the cost of housing for prospective home buyers and raising the development and construction cost for builders of homes and apartments.”<\/p>\n

Mortgage rates are climbing back towards 7% after March’s inflation rate<\/a> came in hotter than expected at 3.5%, lowering expectations that the U.S. Federal Reserve will lower its interest rates anytime soon. Last week, the average rate<\/a> on a 30-year fixed mortgage was 6.88%, according to Freddie Mac<\/a>.<\/p>\n

\u201cSingle-family starts were down in March as interest rates increased and multifamily production fell as builders faced tighter financing conditions,\u201d said Danushka Nanayakkara-Skillington<\/strong>, NAHB\u2019s assistant vice president for forecasting and analysis. \u201cAnd with single-family permits also down in March, single-family production will likely decline again in April.\u201d<\/p>\n

The post New-Home Construction in March Plunges Unexpectedly in Troubling Sign for Homebuyers<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

George Rose\/Getty Images Construction on new homes declined unexpectedly last month, in a troubling sign for homebuyers already grappling with a dearth of homes for sale. Housing starts in March dropped 14.7% from February to a seasonally adjusted annual rate of 1.321 million, according to data released Tuesday by the U.S. Census Bureau and the…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":5203,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=5202"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5202\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/5203"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=5202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=5202"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=5202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}