Why can’t we build housing anymore?
Housing starts and still allows a recessian levels
The housing starts report Today released continues recent trends, indicating that we stay on a home permit that are comparable to those observed during the COVID-19 Pandemie. The current increased mortgage interest rate present challenges for further construction.
Although housing builders actively work on managing mortgage interest, we also know that if the builders could not pay the mortgage interest, the data of housing would be even worse today.
The builder’s confidence is blurring
It is discouraging that we cannot get a momentum with housing start data, which is not surprising when the mortgage interest rises to 7% or higher. It is incredibly frustrating to see the United States deal with such low permits for years. I understand how this is for many Americans. The last Builder Reliability dataWho reflects the prospects for the next six months has also fallen again and it is difficult to stay optimistic when the Outlook of six months continues to fall.
New home sales shows some resilience
On a more optimistic note, new home sales show resilience compared to the recession we experienced in 2022, although they have not yet started with considerable growth. We tend to observe favorable trends when the mortgage interest approaches 6%, while we come across challenges as the rates crawl to 7% or higher. That is why it seems that we are currently navigating a reach that is closely linked to fluctuations in the mortgage interest rate.
If the new home sales were under the lows that we saw in 2022, then that would be a different story; We would see more pressure on the birth, because the demand does not guarantee that it has a lot of work when housing starts and the sale of new living is falling. Fortunately, the builders paid the rates and we had times when the mortgage interest rate went to 6% to help the sale to break under the Lows of 2022 and to keep people employed.
Conclusion
When it comes to housing start data and new sales data for home, we are stuck. Progress continues to stagnate until we implement monetary policy that really promotes growth. For me, this situation depends on the labor market that must shift; Without that we will have to wait for the Federal Reserve Low the rates by 1% to make 6% mortgage interest with duration.
None of these crucial developments have taken place, so that we are brought to this point where the promised housing tree simply did not come out and will not happen quickly.
