Posted on 11/17/2022 7:47:05 AM PST by ChicagoConservative27
New home construction fell again last month as soaring interest rates continued to weaken demand in the housing market.
Housing starts declined by 4.2 percent from September to 1.43 million units, according to Census Bureau data released on Thursday.
The number of new building permits issued in October also fell from the previous month, dropping by 2.4 percent to 1.53 million.
“Both starts and permits fell behind September levels and behind levels from one year ago,” Zillow senior economist Nicole Bachaud wrote in an analysis.
“As the current affordability crisis burns on, builders are feeling demand for new homes slipping further away, depressing confidence in their ability to sell their completed projects at the prices they need,” Bachaud added.
(Excerpt) Read more at thehill.com ...
This wouldn’t be bad if it would start a reverse INVASION at the border.
Charts here. I don’t know how to post charts, but look at start/permits. Boomed with Fed and Fedgov stimulus, and now declining.
Charts here. I don’t know how to post charts, but look at start/permits. Boomed with Fed and Fedgov stimulus, and now declining.
4.2% isn’t a horrific drop - but the problem is that starts aren’t *increasing in a time when demand and prices are high. That’s what should be happening.
Also, interest rates aren’t the only factor. Material costs, labor shortages and land prices are also major factors.
Skyrocketing costs and eternal build dates discourage building.
So what, did someone think higher interest rates would lead to more home building? This is like saying, “I gained weight and now my pants are tight.”
Well, imagine that.
Builders almost always react to negative market factors too slowly.
They will be stopped dead in their tracks when financing becomes unavailable at a cost of capital they can handle.
In a few months these numbers are going to drop a lot more than 4.2%.
“In a few months these numbers are going to drop a lot more than 4.2%.”
Yes, that’s the whole idea. There is no free lunch when you take on inflation.
All hitting the market at a time when interest rates are soaring and the economy is cooling.
Have seen this before and it usually does not end so well.
I work for a large, national home builder. Lay-offs are coming. Q1 around here...
Yeah, 2023 is going to be a year where reality re asserts itself.
Very concerned that developers are going to find themselves upside down in a very tough market.
Maybe they should build structures that people can afford. Mansions and half-million-dollar homes aren’t as affordable to most people these days. But that would reduce the dollar per square foot they can make.
When “Supply Chain” problems take a 4 X 8 sheet of plywood from $8 to $64 +++, cannot blame the contractor.
Half Million $$$ homes in Reno are NOT mansions.
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