New-Home Construction Rebounds in April Despite Higher Mortgage Rates
New home construction saw a slight increase last month, despite the presence of elevated mortgage rates, partially reversing the significant decline experienced in March.
According to SF Gate, housing starts rose 5.7% in April from March, to a seasonally adjusted annual rate of 1.36 million, according to data released Thursday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. But they fell 0.6 percent from a year ago.
“The modest rebound in housing starts in April confirmed that the slump the month before was a weather-related blip,” says Capital Economics property economist Thomas Ryan. “But the recovery wasn’t as strong as we had anticipated.”
With a dearth of existing homes on the market, new construction has played a key role in meeting buyer demand in recent months. But there are signs that higher mortgage rates are weighing on homebuilders, with a key measure of builder confidence plunging last month. Mortgage rates jumped back above 7% in April, ending the month at 7.17%, according to Freddie Mac.
