US housing market hit hard as single-family new home construction plummets

Posted on April 22, 2024   |  

US single-family home construction dipped notably in March, partly due to rising mortgage rates and a limited supply of existing homes for sale.

Single-family housing starts fell by 12.4% last month, reaching 1.022 million units annually, after revisions to February's data.

Despite the monthly decline, single-family home building showed a robust 21.2% increase compared to last year, reflecting ongoing market fluctuations.

The shortage of available housing units persists, with only 757,000 units on the market in Q4, significantly lower than pre-pandemic levels.

Mortgage rates, including the 30-year fixed-rate mortgage, approached 7%, reflecting growing confidence in the labor market and inflation.

The decline in single-family homebuilding was observed across multiple regions, except for the West, which experienced a slight increase.

Projects involving five or more units also saw a significant drop, contributing to the overall decline of 14.7% in housing starts.

While permits for single-family home construction decreased, the number of approved housing units rose, indicating ongoing efforts to address the inventory gap.