Record Housing Surge Faces Uncertainty Amid Rising Mortgage Rates

U.S. single-family homebuilding hit a 10-month high in December, signaling a temporary boost in housing activity despite challenges such as increased mortgage rates and a housing oversupply. Economic predictions suggest that future growth may face constraints due to proposed tariffs and immigration policies by the incoming administration.

In December, U.S. single-family homebuilding rose to its highest level in 10 months, pointing to a brief uplift in housing activity according to the Commerce Department. However, experts caution that this trend could face setbacks due to increasing mortgage rates and an oversupply of homes in the market.

The latest data also reported a rise in permits for future single-family home construction, but these figures are potentially inflated by seasonal adjustment factors. Economists warn that President-elect Trump's pending tariff and immigration policies could exacerbate material costs and labor shortages, curbing future growth.

While the housing market shows signs of vitality, supported by stable retail sales and a significant rebound in manufacturing output, the looming economic policies could pose risks. With interest rates decreasing, there are opportunities for purchases in certain sectors, but potential tariffs on goods might dampen demand.

(With inputs from agencies.)