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US Homebuilders Are Out Of Patience
Given the trajectory of US homebuilder sentiment (which stalled in April and deteriorated in May), it's no surprise that Thursday's new construction data was tepid.
Housing starts rose 5.7% last month to a 1.360 million pace, well below the 1.421 million rate consensus expected.
The result looked even more disappointing by reference to a meaningful downward revision to March's headline. That month's decline now stands at nearly 17%.
The pace of new construction in April, while elevated by p
If I were developing a ground up real estate project today, I would do high-end apartments that are “condo conversion” ready for the future point in time when rates drop.
Always tricky to get everything timed right with real estate development projects, however.
When homebuilders decry high interestrates are they referring to real interest rates? I doubt it. I think there are looking at what the fed did when rates bottomed at record low numbers. From April 1971 thru December 2023, the average 30 year fixed conforming mortage was 7.74%. I believe that rates were too low for too long twice since 2006. There are quite a few moving parts that led to grumpy homebuilders. I was involved with pricing and distributing bonds of many varieties for publicly traded homebuilders in a meaningful way…