U.S. Homebuilding Stalls Amid Weather and Economic Pressures

U.S. single-family homebuilding fell in October, impacted by Hurricanes and higher mortgage rates. Although permits rose, the housing market remains sluggish due to elevated borrowing costs. Despite a slight rise in multi-family starts, a sustained rebound faces challenges from supply shortages and affordability issues.

In October, U.S. single-family homebuilding experienced a sharp decline, primarily attributed to the effects of Hurricanes Helene and Milton in the South, alongside rising mortgage rates. Despite a slight increase in permits, the broader housing market remains constrained, as reported by the Commerce Department.

Single-family housing starts fell by 6.9% to a seasonally adjusted annual rate of 970,000 units, while the multi-family sector saw a 9.8% increase. Economists had anticipated a more significant drop in housing starts, which fell by 3.1% overall to an annual rate of 1.311 million units.

The housing market is still grappling with supply shortages and affordability issues as higher borrowing costs deter potential buyers. Although new housing supply has picked up from 2008 levels, the anticipated rebound is likely to be muted unless new construction significantly increases.

(With inputs from agencies.)