Home construction surged last month as mortgage rates fell

Home construction surged last month as mortgage rates fell.

Housing starts, aka construction on new homes, jumped by 14.8% in November compared to the previous month.

Single-family homes led the market:

“The number of new single-family homes under construction was up more than 40% compared to a year ago,” said the chief economist at Bright MLS.

From Briefs Media, LLC aka Market Briefs

Breakdown: Last month, lower mortgage rates increased the affordability of new homes. Builders beefed up construction to ensure they have enough supply to meet the pent-up demand.

Not as Expected

Despite a decline in interest rates, mortgage demand showed little enthusiasm.

However, homeowners called up their refinancing guy. Last week, refinance demand was 18% higher than the same week one year ago.

Prediction: The Mortgage Bankers Association (MBA) also predicted positive news for the future of the housing market.

  • Despite a “mild recession” in the first half of next year, the MBA thinks that a drop in inflation alongside potential rate cuts will push 30-year fixed mortgage rates to their lowest levels in a long time.
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