US Housing Construction Hits Five-Month Low Amid Harsh Winter, Elevated Mortgage Rates

January saw a significant drop in new home construction, marking the lowest level since August 2023, as winter storms and high mortgage rates exacerbate the ongoing housing shortage.

New home construction fell by approximately 15% in January, with housing starts dropping to a seasonally adjusted annual rate of 1.33 million units.
The decline in housing starts is partly attributed to harsh winter conditions and the continuation of elevated mortgage rates.
Building permits, a forward-looking indicator, also decreased by 1.5% in January, though they remain 8.6% higher than the same period last year.
Economists express concerns over the housing market's stifled supply, with the U.S. estimated to be down about 4 million homes to meet demand.
Optimism exists for a potential increase in single-family home construction in 2024, driven by expectations of falling borrowing costs.