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.
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.
Building professionals can expect modest single-family housing growth this year as regulatory reforms and tax cut extensions counterbalance potential tariff and immigration challenges.
Elevated mortgage rates, regulatory burdens, and tariff concerns are driving up housing costs, with typical families now spending nearly 40% of income on mortgage payments.
Residential construction is increasingly moving to suburban and outlying areas due to rising building costs, land scarcity, and worker shortages, according to a new NAHB report.
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%.
Confidence in the market for new multifamily housing showed mixed results year-over-year in the third quarter, according to results from the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB).
With the Federal Reserve beginning an easing of monetary policy and builder sentiment improving, single-family starts posted a modest gain in September while multifamily construction continued to weaken because of tight financing and an ongoing rise in completed apartments.
Builder sentiment for new single-family homes increased in October, despite ongoing affordability challenges. The National Association of Home Builders reports optimism for 2025 market conditions, with builders anticipating easing inflation and moderating mortgage rates. The upcoming election remains a key factor in housing policy outlook.
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