New Home Construction Coming Back: Home Builder Sentiment Increasing

New home builder sentiment is increasing after 12 straight months of decline. New home building is likely to take off again in 2023 as interest rates have dropped to the lowest levels in 4 months and sharply down since November 2022. More new home buyers are interested in buying new homes.

High mortgage interest rates choked off demand for new homes which forced new home builders to slow down housing starts and building permits. Also supply chain issues made new home building more expensive.

It is likely that new home construction will be off the charts in 2024 as the economy grows post recession, if a recession in 2023 even happens. Predictions for the 2023 housing market are that home prices will moderate and interest rates will decline. While there will be less new homes built in 2023, this should increase again in 2024.

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