US Commerce Department data on Tuesday had revealed that US homebuilding sharply turned south in September with building permits for new homes plunging to a fresh one-year low, as a lingering shortage in raw materials and labours appeared to be taking a greater-than-anticipated toll on the economy, vindicating analysts’ belief that US economic growth had slowed sharply on Q3, 2021.
More importantly, the US Commerce Department’s report also had unfurled that the gap between volume of houses having completed and still under-construction, had widened to a record peak last month, suggesting an utterly strained supply chain coupled with a worker shortage and a flare-up in inflation indicators had bottlenecked developers’ investments on new homes.
In tandem, US mortgage buyer Freddie Mac said that its 30-year fixed home loans edged 0.06 per cent higher to 3.05 per cent as of last week, while 15-year fixed mortgages were hovering at 2.3 per cent, up 0.07 per cent compared to a week earlier, as a rapid upsurge in inflationary pressure had spurred up prospects of a rate-hike as early as by mid- to late-2022.
US homebuilding stumbles last month
According to US commerce Department data, US housing started were slumped by 1.6 per cent to an annualized rate of 1.555 units last month on an adjusted basis, hitting a fresh six-month low, while August US housing starts were revised lower to an annual rate of 1.580 units from an initial estimate of 1.615 million homes.
Aside from that, building permits pummelled 7.7 per cent in September, but, US single family building permits indented marginally by 0.9 per cent. In tandem, US single family housing starts, the most lucrative item in US homebuilding industry, remained unchanged, while multi-family housing starts fell by as much as 5.0 per cent.
Meanwhile, voicing a cautiously optimistic tone, a chief US economist at High Frequency Economics in White Plains, New York, Rubeela Farooqi said, “Momentum in demand still appears to be positive. But supply is struggling to catch up given higher input costs and shortages that remain headwinds for builders”.