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Breaking Records: Single-Family Home Construction Skyrockets Despite Mortgage Hikes

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This week is important for housing statistics. On Monday, homebuilders expressed optimism about the housing market. Bloomberg’s Conor Sen said, “We’re probably going to see the highest rate of new construction this year for single-family homes since probably the 2008 crisis.”

The U.S. Census Bureau released February housing starts, construction permits, and house completions on Tuesday. In fact, all of them increased month over month and year over year. These figures are very unpredictable. Still, they tell us something. Typically. New house development slows with rising interest rates. Builders would reply, ‘OK, higher interest rates mean fewer purchasers. “We don’t want to keep building,” said Zonda housing data and consulting analyst Ali Wolf.

Higher lending rates have tightened resale inventories, providing builders a chance. Construction is underway.”

That will likely continue, she said. Zonda reports that 80% of homebuilders will build more this year. Bright MLS chief economist Lisa Sturtevant stated their building changes.

“Single-family starts are rising,” she said. However, multifamily construction peaked last year. The slowness exists.” While rents are declining in certain places, demand for single-family homes remains high.

The housing market is still vastly undersupplied,” she said. “This is bringing us back to balance, but we have a long way to go.”  Wolf of Zonda said most of these new single-family homes are in suburbs, some far from downtowns. She said “pockets of the Midwest, Southeast, and Southwest have seen big increases in new housing supply coming online”.

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