US SINGLE-FAMILY HOUSING STARTS, PERMITS NEAR TWO-YEAR HIGHS
U.S. single-family homebuilding rebounded sharply in February, hitting the highest level in nearly two years, boosted by mild temperatures and a persistent shortage of previously owned houses on the market. Despite the hurdle created for many first-time buyers by higher mortgage rates, builders are cutting prices and offering other incentives to increase sales. They are also reducing the size of the homes being built to manage higher material costs. The Commerce Department also showed permits for the future construction of single-family housing units rose to more than a 1-1/2-year high last month. With mortgage rates gradually trending lower on expectations the Federal Reserve will start cutting interest rates by June, homebuilding could contribute to economic growth this year.
"Single-family starts could remain strong in the next couple of months as builders continue to see demand for new builds despite the headwinds facing buyers," said Daniel Vielhaber, an economist at Nationwide. "Rate incentives from builders continue to help buyers afford homes on the new side of the market." Single-family housing starts, which account for the bulk of homebuilding, surged 11.6% to a seasonally adjusted annual rate of 1.129 million units last month, the Commerce Department's Census Bureau said. That was the highest level since April 2022.
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