Despite high construction costs and mortgage rate volatility on the horizon, residential contractors are optimistic about new-construction projects in 2023. The average 30-year fixed-rate mortgage dropped to 6.1% in February after peaking at 7.08% in October, and roughly 80% of builders are already saying that slight boost in affordability is having a positively effect on business in the residential construction sector.
Though homebuying activity is expected to be sluggish in the months ahead, experts say home construction levels could rebound by late 2023 and into the start of 2024, Construction Dive reports.
“The nation continues to face a sizable housing shortage that can only be closed by building more affordable, attainable housing,” said Alicia Huey, NAHB chairman. “However, the two monthly gains for the HMI at the start of 2023 match the cautious optimism noted by the large number of builders at the recent International Builders’ Show in Las Vegas, who reported a better start to the year than expected last fall.”
Advertisement
Related Stories
Market Data + Trends
Data Show New-Home Construction Starts Slowed at the End of 2023
Despite falling mortgage rates and a continuing shortage of housing inventory, the annual pace of new-home construction slowed in December
Housing Markets
Top 10 Metros for New Homes in 2024
Punta Gorda, Fla., and Myrtle Beach, S.C., top the list of places where new-home construction is booming
New-Construction Projects
US Housing Starts See Unexpected Surge in November
Census Bureau data show new-home construction was up 14.8% in November, suggesting the housing crunch may be easing