Posted on 09/19/2023 7:05:26 AM PDT by Diana in Wisconsin
US home building sank in August, dropping 11.3% from July levels, as mortgage rates stayed elevated amid lingering inflation.
Housing starts, a measure of new-home construction, dropped to a seasonally adjusted annual rate of 1.283 million last month, well below expectations of 1.44 million, according to data released Tuesday by the Census Bureau.
It was the lowest level since June 2020.
The number of units started was 14.8% lower than a year ago.
Single‐family housing starts, which account for most of the construction, dropped 4.3% in August from the revised July figure, at a seasonally adjusted annual rate of 941,000.
After rising in July, new home starts dropped in August as mortgage rates climbed back to their late 2022 peak.
“The combination of high interest rates, high pricing, and limited inventory has continued to plague the housing market,” said Kelly Mangold of RCLCO Real Estate Consulting. “In many cases, even repurchasing their same home at today’s mortgage rates would be out of a typical buyer’s price range.”
More than 90% of homeowners have a mortgage rate under 6% and many have rates closer to 2% or 3%. Few want to sell and buy a new home with rates now over 7%. This has led to extraordinarily low inventory of existing homes for sale.
(Excerpt) Read more at channel3000.com ...
My response was to your response. It’s a conversation.
I’ll make sure to avoid any with you.
Agreed. The current mortgage rates are the highest they have been since 2001, but that's because the mortgage rates over the last few years have been well below average. Specifically, the average mortgage rate from 1971 to date is 7.41%, which is slightly higher than the current average rate. From 1971 through 1999, mortgage rates averaged between 7.88% and 12.82% with a high of 18.63% in October 1981 (thank-you Jimmy Carter). Yes, the rates are high compared to the last 10 years, but they are by no means "crushing" compared to the 50 year averages.
https://money.usnews.com/loans/mortgages/articles/historical-mortgage-rates
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