According to the latest Housing starts report US home construction increased 9.8% in February despite the rise in mortgage rates, which caused many potential buyers to walk away from the market.
This new rise, however, it is still 18.4% less than in 2022, when mortgage rates increased between May and July causing construction to suffer sharp falls.
For Kelly Mangold of RCLCO Real Estate Consulting “builders showed signs of optimism in anticipation of increased demand from buyers,” she said while mentioning that “interest rates and development costs remain high, while prices they are softening, which is affecting the upside potential of home sales,” he said.
The National Association of Realtors (NAR) recently highlighted in a report that due to high prices sales last year fell at a slow rate, compared to the last 10 years.
Although this year, analysts say that in some cities in the United States where prices remained high they will experience a double-digit drop by 2024. According to Goldman Sachs, this phenomenon will be seen in four cities in particular; Seattle with 12%, San Francisco 15%, Austin 19% and Phoenix 16%.
The Goldman Sachs analysis suggests that the high mortgage and interest rates, the latter proposed by the Federal Reserve to control inflation, will cause a collapse in prices reaching levels of 6%.
However, when measured in general terms, the affordability crisis continues and worsens as the months go by, the company specialized in the real estate market, Redfin, highlighted at the beginning of March that only 21% of available housing nationwide can be considered affordable housing.
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Source: La Opinion
