Homebuilders Ramp Up Construction Amid Falling Mortgage Rates

Despite a surge in November, annual construction of single-family homes is on track for a second year of decline.

Homebuilders are increasing construction of single-family homes as mortgage rates decline, with a 42.2% increase in housing starts from November last year.
Despite the increase, construction of single-family homes is on track for its second consecutive annual decline, with starts down 7.2% for the first 11 months of this year compared to the same period in 2022.
Many homeowners are locked into a mortgage rate well below current rates, which is likely to keep the inventory of previously occupied homes for sale constrained.
Several housing economists predict that mortgage rates will only moderately decrease next year, with the average rate on a 30-year home loan expected to remain above 6%.
The National Association of Home Builders projects a 4% increase in single-family starts next year, while Realtor.com forecasts a more modest 0.4% increase.