New Home Construction Falls Again in October

Housing starts declined by 4.2 percent from September to 1.43 million units, according to Census Bureau data released on Thursday.

The number of new building permits issued in October also fell from the previous month, dropping by 2.4 percent to 1.53 million.

“Both starts and permits fell behind September levels and behind levels from one year ago,” Zillow senior economist Nicole Bachaud wrote in an analysis.

“As the current affordability crisis burns on, builders are feeling demand for new homes slipping further away, depressing confidence in their ability to sell their completed projects at the prices they need,” Bachaud added.

The Federal Reserve’s series of interest rate hikes targeting rising inflation have led to high mortgage rates that are pushing prospective buyers out of the market.

Recent data shows that monthly mortgage payments have more than doubled from pre-pandemic levels reaching $1,840 for a typical single-family home after a 20 percent down payment.

These high rates are also driving home builder sentiment to decade lows, according to data released Wednesday by the National Association of Home Builders.