which is leading to falling home sales<\/a>\u2014this isn\u2019t good news for buyers hoping for an improvement in home affordability.<\/p>\n\n\n\nSingle-family home starts dropped in September and were down 5.6% since the beginning of the year, the Commerce Department reported this week. Multifamily construction, which had been a bright spot in the new-home market, now also is slowing, dropping 13.2%.<\/p>\n\n\n\n
Robert Dietz, chief economist for the National Association of Home Builders, warns that expectations for further interest rate hikes from the Federal Reserve likely will further dampen new-home production. \u201c2023 is forecasted to see additional single-family building declines as the housing contraction continues,\u201d he says. \u201cWhile some analysts have suggested that the housing market is now more \u2018balanced,\u2019 the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers.\u201d<\/p>\n\n\n\n
Builders are blaming rapidly rising mortgage rates, ongoing supply chain disruptions and affordability challenges for the rapid pullback in the new-home market. \u201cHigh mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,\u201d says NAHB chairman Jerry Konter. \u201cThis situation is unhealthy and unsustainable. Policymakers must address this worsening housing affordability crisis.\u201d<\/p>\n\n\n\n
Builder sentiment about selling conditions and buyer traffic has fallen to its lowest level since 2012, excluding the first two months of the pandemic in 2020, according to the NAHB\/Wells Fargo Housing Market Index.<\/p>\n\n\n\n
Facing an Even Worse Housing Shortage<\/h2>\n\n\n\n
\u201cIt is understandable for homebuilders to be cautious in light of slowing home sales and recent private sector data that indicates softening lease signings for new apartments,\u201d says Lawrence Yun, chief economist for the National Association of REALTORS\u00ae. However, he notes, the current annualized rate of 1.44 million new units is lower than the historical average of 1.5 million. Maintaining the historical average is necessary to accommodate the rising population, Yun says. Meanwhile, the rental vacancy rate of 5.6% nationwide is at a 30-year low, and the homeowner vacancy rate of 0.8% is at a 40-year low. New listings are slowing nationwide at a time when many homeowners are reluctant to sell and give up the 3% mortgage rates they secured in the last few years. \u201cWhen mortgage rates retreat after inflation is tamed in the coming years, we could again encounter an acute housing shortage,\u201d Yun says.<\/p>\n\n\n\n
\u00a9National Association of REALTORS\u00ae
Reprinted with permission<\/p>\n","protected":false},"excerpt":{"rendered":"
Forced to slow down construction as buyer demand plummets, builders predict lower home starts through 2023. Builders are pulling back as the new-home market stalls, and a slowdown in construction is projected to last through 2023. In a housing market already sorely lacking inventory\u2014which is leading to falling home sales\u2014this isn\u2019t good news for buyers … <\/p>\n
Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,8],"tags":[5,32,4,9],"class_list":["post-23236","post","type-post","status-publish","format-standard","hentry","category-news","category-real-estate-tips","tag-anthony-didonato","tag-news","tag-real-estate","tag-tips","item-wrap"],"yoast_head":"\nBuilders Call New-Home Market \u2018Unhealthy and Unsustainable\u2019 - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.anthonydidonato.net\/wordpress\/builders-call-new-home-market-unhealthy-and-unsustainable\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/builders-call-new-home-market-unhealthy-and-unsustainable\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/builders-call-new-home-market-unhealthy-and-unsustainable\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"headline\":\"Builders Call New-Home Market \u2018Unhealthy and Unsustainable\u2019\",\"datePublished\":\"2024-02-06T16:08:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/builders-call-new-home-market-unhealthy-and-unsustainable\\\/\"},\"wordCount\":443,\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"keywords\":[\"Anthony DiDonato\",\"News\",\"Real Estate\",\"tips\"],\"articleSection\":[\"News\",\"Real Estate Tips\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/builders-call-new-home-market-unhealthy-and-unsustainable\\\/\",\"url\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/builders-call-new-home-market-unhealthy-and-unsustainable\\\/\",\"name\":\"Builders Call New-Home Market \u2018Unhealthy and Unsustainable\u2019 - 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