The Largest Reduction in New-Home Development in Four Years Despite a Housing Scarcity in America

US: As a result of home builders cutting back on new projects, the number of new homes that were built in March decreased by 14.7%. Because of the increasing mortgage rates, the pace of development slowed down as builders struggled to meet the demand for their products.

According to the government's announcement on Tuesday, the number of housing starts dropped from 1.55 million in February to 1.32 million on an annual basis. That is the number of homes that would be constructed over the course of an entire year if the rate of building was maintained throughout the entire year at the same rate as it was in March.

In recent months, there has been a discernible downward trend in the price of new building. As of March, the number of new housing starts was at its lowest level since August 2023. Wall Street anticipated a decrease of 1.48 million, but the statistics showed a greater decline than that. Seasonal adjustments have been made to all of the figures. The month of March saw a significant decline in both single-family and multi-family construction.

On the other hand, a more recent survey of builders conducted in January revealed that builders are largely still positive about future sales of new houses. They are also confident about demand since they anticipate that interest rates will continue to fall for the remainder of the year.

Source: MarketWatch