Homebuilding recovery remains ‘next to nil’ until demand improves

By Brian Evans
Market Insider
December 20, 2022
Category: Finance & Economics
Region: United States

Kieran Clancy

Homebuilding has more room to decline as the housing market showed continued weakness on Tuesday, according to Pantheon Macroeconomics. Housing starts dipped 0.5% in November as single-family construction dropped 4.1% while the more volatile multifamily category rose 4.8%, according to the Commerce Department. Meanwhile, building permits plunged 11.2%, with single-family permits down 7.1% and multifamily down 17.9%. “The number of authorized projects which have not been started remains extremely elevated, so permits likely will fall further still; in the face of falling demand, developers don’t need to keep adding to their pipeline at the current pace,” senior US economist Kieran Clancy wrote. …Clancy added that the likelihood of a homebuilding recovery remains “next to nil until housing demand improves in a sustained and meaningful way.” While the spring of 2023 is a possibility, “we aren’t holding our breath.”

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