U.S. single-family homebuilding surged to more than a 1-1/2-year high in November and could gain further momentum, with declining mortgage rates and incentives from builders likely to draw potential buyers back into the housing market. The report from the Commerce Department on Tuesday also showed permits for future construction of single-family housing last month increased to the highest level since May 2022. A jump in mortgage rates had dampened new construction activity in recent months. The new housing market remains underpinned by an acute shortage of previously owned homes available for sale.
Economists raised their fourth-quarter gross domestic product growth estimates, and predicted that the housing market would help the economy avoid a recession next year. "American housing demand is permanently higher than before the pandemic since people are spending more time at home," said Bill Adams, chief economist at Comerica Bank in Dallas. "As long-term interest rates fall, builders will add more supply to the housing market to meet that demand, fueling economic growth."
Source: Reuters