New residential construction activity declined 4.2% from September to October, to 1,425,000 units from 1,488,000 units at the annual rate, according to the U.S. Census Bureau.
What’s going on: Construction of single-family homes dipped 6.1% in the same period, to 855,000 units from 911,000. That’s the slowest pace of construction since May 2020.
- Construction of multifamily homes, often volatile from month to month, declined 1.2%, to 570,000 units from 577,000 units.
- New housing starts overall fell 20.8% on a year-over-year basis.
Meanwhile … New housing permits, which are a proxy for future residential building, dipped 2.4%, to 1,526,000 units from an annualized 1,564,000 units.
- Permits for single-family homes fell 3.6%, to 839,000 units from 870,000, down for the eighth straight month and to the lowest level since May 2020.
Why it’s happening: Said NAM Chief Economist Chad Moutray, “Higher mortgage rates and issues with affordability have sharply lessened demand in the housing market, which has fallen into a recession in recent months.”