Construction of new homes in the U.S. fell more than 9 percent in September to an annual rate of 1.26 million units, down from 1.39 million in August, which was a 12-year high. However, experts anticipate the September drop to be only temporary as the number of permits filed to build new homes, an indicator of future housing starts, shot up 8 percent compared to a year earlier.
Construction has increased steadily over the last several months as declines in mortgage rates put increased pressure on builders to bring more new homes on line. While they have picked up the pace, builders are still falling behind keeping home prices inflated.
New worries about a slowdown in the economy is likely to also make builders more cautious before beginning new projects.
Today, conforming no-point 30-year fixed mortgage rates are averaging 3.75 percent and 15-year rates are near 3.125 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.