U.S. housing starts fell sharply in May, dropping 9.8% to a seasonally adjusted annual rate of 1.26 million units, driven primarily by a steep decline in multifamily construction amid persistent economic headwinds.
New home sales jumped 10.9% in April to 743,000 units despite high interest rates and construction costs. Home builders call it an anomaly, with 61% now offering sales incentives. Year-to-date sales still down 1.2% as industry faces ongoing economic uncertainty.
The typical home purchased in America reached a record median age of 36 years in 2024, nine years older than in 2012, according to Redfin. A construction shortage since 2008's financial crisis forces buyers into older properties, with Buffalo homes averaging 69 years old versus just six years in Provo.
Growing economic uncertainty stemming from tariff concerns and elevated building material costs kept builder sentiment in negative territory in April, despite a modest bump in confidence likely due to a slight retreat in mortgage interest rates in recent weeks.
Houzz's Q2 2025 Renovation Barometer reveals tempered optimism among construction and design professionals following a mixed Q1. Rising material costs, client caution, and labor shortages are compounding concerns over impending tariffs, prompting businesses to adjust strategies accordingly.
The National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index (CHI) found that in the third quarter of 2024, a family earning the nation’s median income of $97,800 needed 38% of its income to cover the mortgage payment on a median-priced new home.
October housing starts fell to 1.31 million units annually, with single-family starts down 6.9% but up 9.3% year-to-date. Despite rising mortgage rates, builders remain positive about 2025's outlook, anticipating regulatory improvements and Federal Reserve interest rate cuts to boost construction activity.
Builder confidence increased to 46 in November, marking the third consecutive monthly gain. While optimism grows over potential Republican regulatory relief, challenges persist, including labor shortages, lot availability, and elevated material prices. Price cuts remained steady at 31% of builders, with average reductions of 5%.
Approximately 90% of metro markets (196 out of 226, or 87%) registered home price gains in the third quarter of 2024, as the 30-year fixed mortgage rate ranged from 6.08% to 6.95%, according to the National Association of Realtors’ latest quarterly report.