Higher Mortgage Rates Continue to Upend New Residential ConstructionSource: Economics Group of Wells Fargo Bank, N.A.Summary Decline in Building Permits Points to Further Drops Ahead
- Housing starts fell 4.2% to a 1.425 million-unit pace in October, the second straight monthly drop. Total housing starts are now down 8.8% on a year-over-year basis.
- This year’s run-up in mortgage rates has chilled buying activity and home builders have responded by cutting back single-family development.
- Single-family starts declined 6.1% during October, a 20.8% yearly drop.
- Multifamily construction has been more resilient to the effects of rising interest rates. Despite slipping 1.2% during the month, multifamily starts are running at 570K-unit pace, which is 17.8% above the prior year’s levels.