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The US single-family housing sector showed improvement in March, with an increase in homebuilding and permits for future construction. The Commerce Department reported that single-family housing starts, which make up the majority of homebuilding, rose by 2.7% to a seasonally adjusted annual rate of 861,000 units last month. This was an improvement from February, which saw a rate of 838,000 units, revised from the previously reported 830,000 unit pace.
The Federal Reserve’s aggressive interest rate hikes had previously caused a housing market recession, with residential investment contracting for seven quarters, the longest such period since the 2007-2009 Great Recession.
However, signs of stabilization have emerged, such as the National Association of Home Builders/Wells Fargo Housing Market index climbing to a seven-month high in April. Mortgage rates have also decreased from their 2018 peak, with the rate on the 30-year fixed mortgage at 6.27% as of last week, down from 7.08% in November.
However, the recent financial turmoil resulting from the collapse of two regional banks may lead to banks and mortgage lenders tightening their underwriting standards. Single-family building permits also increased, rising by 4.1% to a rate of 818,000 units in March.
Reference Source: MarketScreener
