Updated March 21st, 2024 at 16:41 IST

US housing sector rises with 10.7% jump in construction starts

The resurgence, led primarily by an uptick in single-family home construction, highlights renewed optimism amongst builders and buyers alike.

Reported by: Business Desk
Housing | Image:Pexels
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US Housing Recovery: Housing starts witnessed a turnaround in February, marking a resurgence in the sector and signalling a strong recovery in the US market. The latest data revealed a notable 10.7 per cent surge in commencement of residential construction, offering hope to an industry that has weathered major challenges in recent times.

Builder and buyer optimism

The resurgence, led primarily by an uptick in single-family home construction, highlights renewed optimism amongst builders and buyers alike. Single-family housing starts, up by 35 per cent from the previous year, indicate favourable building conditions and a promising outlook for the upcoming spring selling season.

However, the multifamily segment presents a contrasting narrative, grappling with a notable 34 per cent decline from the previous year. This variance highlights the regional disparities within the real estate sector, with the Midwest and the South showcasing resilience while the Northeast and the West struggle to gain traction.

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Mortgage rate incentives

Builders, buoyed by improving market sentiment, are capitalising on this momentum by offering enticing incentives to prospective buyers. Mortgage rate buydowns, in particular, have emerged as a key strategy to attract buyers, with builders shouldering the upfront costs to lower loan rates—a move that has resonated well with consumers navigating a dynamic market.

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Notably, there is a fundamental shift in the housing market dynamics, with new home sales outperforming existing home sales—a trend that bodes well for builders and industry stakeholders alike. The rebound in housing starts and permits serves as a tangible indicator of the market's healing process, fuelled in part by softening mortgage rates and improving consumer confidence.

(With Reuters Inputs)

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Published March 21st, 2024 at 14:53 IST