US residential construction tops expectations

“While there is no lack of demand from households seeking to purchase – many of these same buyers cannot afford the high prices these new homes command with mortgage rates where they stand today.”

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The slowdown in the single-family market has been reflected in homebuilder sentiments, which have posted declines every month since the start of 2022, according to National Association of Home Builders (NAHB) chairman Jerry Konter.

NAHB’s new survey showed builder confidence in the market for newly built single-family homes dropped for the ninth straight month in September, down three points to 46, the lowest level since May 2014 except for the spring of 2020.

“Today’s housing starts report is more evidence that the housing recession is deepening for the single-family market, with the pace below one million for the last two months,” added Jing Fu, NAHB’s director of forecasting and analysis. “Expected additional tightening of monetary policy from the Federal Reserve, falling builder sentiment, and a 15.3% year-over-year decline in single-family permits points to further weakening for the housing sector. The one bright spot is multifamily construction, which remains very strong given solid demand for rental housing.”