US Housing Construction Surge

As record-low interest rates drive housing demand, US home construction surged by the most in three decades

Throughout the Covid-19 pandemic, the housing market has remained strong due to low interest rates along with families looking for more space in their homes.  This demand, however, has brought with it an increase in home prices as the pool of homes for sale remains relatively small.  A surge in new home construction, however, indicates a positive outlook for the housing market in the months ahead.  US home construction starts increased in July by more than forecast and applications to build surged by the most in three decades.  This shows builders are responding to strong demand for housing.

Applications to build increased 18.8 percent, the most since January 1990, showing a positive outlook for future construction.  The housing market has been a bright spot for the economic recovery as low mortgage rates help make buying a home more affordable.  The latest data highlights that rebound, while more recent figures suggest the trend will continue, with a measure of home builder sentiment increasing in August to match the highest on record.

The housing market will still face certain challenges, such as an increase in the cost to build and certain supplies, but these numbers indicate growth in the market and economy in the coming months.

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