Americans could finally have homes to buy

Construction of new homes was completed in September and builders began building more new homes compared to the previous month, a silver lining for a real estate market struggling with high borrowing costs and low supply.

Just over 1.45 million homes were completed in September, a 6.6 percent increase from the previous month, data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development showed Wednesday. The number of single-family homes completed was almost one million, an increase of 5.3 percent compared to August.

Meanwhile, housing starts, which capture new home construction starts, also saw a 7 percent increase in September from the previous month, suggesting builders were ready to invest in new construction. Still, approvals for new building permits fell 4.4 percent last month compared to August.

This month’s increase in housing starts was smaller than expected, said Nancy Vanden Houten, senior U.S. economist at Oxford Economics.

“Building permits, the more forward-looking indicator of activity, fell, suggesting a slower pace of housing starts in the coming months,” she wrote in a note she shared Newsweek. “Higher mortgage rates and deteriorating homebuilder sentiment will impact single-family home starts, although inventory needs may cushion the downside somewhat.”

The multifamily segment, which may face greater headwinds, could see deterioration in the future.

“Builders in this sector are facing a tightening of lending standards,” said Vanden Houten.

The Federal Reserve has raised interest rates to their current level of 5.25 to 5.5 percent, the highest level in two decades. The rise in interest rates has helped increase borrowing costs for housing, auto and business investment loans.

The expensive loans have put significant pressure on the housing market as buyers struggle to afford mortgage rates, which lender Freddie Mac says have slowly approached 8 percent, the highest in more than two decades. Prices do ease slightly as summer moves into fall, but are still high because inventory is low compared to demand.

This could explain why mortgage applications are declining. On Wednesday, the Mortgage Bankers Association said applications for new mortgages fell nearly 7 percent in the week ending Oct. 13, 2023.

“Applications fell to the lowest level since 1995 as the 30-year fixed mortgage rate rose for the sixth straight week to 7.70 percent – the highest level since November 2000,” said Joel Kan, MBA vice president and deputy chief economist .

Real estate market
An aerial view of homes in a housing development with new homes under construction (R) on September 8, 2023 in Santa Clarita, California. New home construction skyrocketed in September 2023, according to new data.

Rick Schindler

Rick Schindler is a Worldtimetodays U.S. News Reporter based in Canada. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Rick Schindler joined Worldtimetodays in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing:

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