A decline in homebuilding in the U.S. last month surprised economists who had expected an increase in construction activity. Housing starts fell by 1.6 percent in September to a seasonally adjusted annual rate of 1.555 million units. This data provided from the Department of Commerce is starkly different from the increase to 1.620 million units anticipated by economists polled by Reuters.
Permits for future residential construction projects dropped by 7.7 percent suggesting housing starts are likely to be sluggish over the next few months. A sharp increase in building material costs and staffing shortages are creating challenges for homebuilders who are struggling to keep up with demand.
Across the U.S. there are many housing projects permitted for building but yet to see any construction progress due to these challenges. Still, homebuilders remain confident in the future of the industry as demand for new homes remains extraordinarily high.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.875 percent and 15-year rates are near 2.25 percent.
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