Live News: US Mortgage Rates Drop to 4-Month Low

The rate of new home construction in the United States fell to its lowest level in five months, as rising mortgage rates dampened demand.

U.S. housing starts in December fell 1.4% month-over-month to an annualized pace of 1.38 million, the lowest level since July, the Commerce Department said Thursday. . That missed economists’ estimates for a more modest decline to 1.36 million.

The multi-family sector led housing starts down last month, down 18.9% from November. Single-family home starts, however, increased for the first time in four months by 11.3%.

Home building permits, considered a leading indicator of the market, fell 1.6% from the previous month to an annualized pace of 1.3 million – the lowest level since May 2020 – and estimates economists missing for 1.37 million.

Single-family permits fell 6.5% from November and 34.7% from a year ago, but moderating mortgage rates could boost single-family permits in the coming months. come as housing affordability improves.

“Single-family permits tend to largely follow mortgage applications, which appear to be rebounding – very modestly – following the decline in mortgage rates since late October,” said Kieran Clancy, senior U.S. economist at Pantheon Macroeconomics.

The 30-year mortgage rate averaged 6.3% last week, down from November’s high of 7.08%, according to Freddie Mac.

“The bigger picture is that most of the downward adjustment in building applications in response to the collapse in demand since the end of 2021 is now over, although new home prices still need to fall. “, said Clancy.

Leave a Comment

Your email address will not be published. Required fields are marked *