Residential construction falls but experts planning for rebound

Residential construction falls but experts planning for rebound

Residential construction falls but experts planning for rebound
With the pandemic forcing a major slowdown in the economy, builders held off on the construction of new homes last month. The U.S. Census Bureau reported this week that construction permits fell 20.8 percent compared to March and housing starts dropped a whopping 30.2 percent.

The pandemic also slowdown the rate of completion of existing projects. Overall, completions were down 8.1 percent. This is likely to exacerbate an already chronic shortage of homes on the market which will lead to further affordability woes for buyers.

However, industry experts anticipate that construction figures will rebound in the next month as restrictions begin to ease in the U.S. While April is being deemed as a setback, builders are prepared for a resurgence of demand for new homes for the remainder of the year.

Today, conforming no-point 30-year fixed mortgage rates are averaging 3.375 percent and 15-year rates are near 2.75 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.