US single-family housing starts indent to 2-1/2 years low, as higher mortgages bite

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US single-family housing starts indent to 2-1/2 years low, as higher mortgages bite

US single-family homebuilding, the most lucrative market in US housing industry, had bottomed to a nearly 2-1/2-year low on November, while building permits for future constructions tumbled as well, as a higher mortgage rate continues to depress US housing market activity.

In the matter of the fact, latest downbeat data from the US Commerce Department came forth as other economic data released earlier in the day had revealed that the potential homebuilders’ confidence fell for a record twelve straight months in a row in December.

If truth is to be spoken, US housing market has been feeling the pinch of a higher mortgage rate since the beginning of US Fed’s aggressive rate-hike cycle earlier in the year, while many Fed policymakers are projecting the US Central Bank’s interest rate to hover above a targeted 5.1 per cent by next year.

According to US mortgage buyer Freddie Mac, the most-attractive US 30-year fixed rate home loans were hovering at 6.31 per cent last week, while 15-year Fixed-rate mortgages rose 0.13 per cent last week to 5.54 per cent, eventually adding a dour outlook to US housing market.

US single-family housing starts, building permits fall as higher mortgages weigh

According to data from US Commerce Department, US housing starts fell by 0.5 per cent last month, while US single-family housing starts were plunged by as much as 4.1 per cent.

On top of that, building permits for new house drowned as much as 11.2 per cent, reflecting towards a bitter breeze ahead for the US homebuilding industry. Meanwhile, addressing the impacts of US Fed’s aggressive rate-hike cycle into the US homebuilding industry, a chief economist of FWDBONDS in New York, Christopher Rupkey said, “The Fed's rate hikes are doing what they are supposed to, further deepening the recession in the residential housing construction markets.

There's nowhere for homebuilders to hide. We don't know about the rest of the economy, but the housing market is clearly in recession”.