New home construction fell nearly 10% as US homebuilders weigh demand concerns amid home buying affordability challenges. Realtor.com chief economist Danielle Hale joins Brad Smith to break down the data and what it signals about the state of the housing market.
"There's some uncertainty that builders are experiencing right now, and we see that reflected in the data with that pullback in starts," Hale says, adding, "There are a couple of good things happening in that data," including "completions ticked higher," which "will near-term boost supply, which will be good for buyers but will make it a little bit more challenging [as] builders will have to compete with each other to get rid of and to sell that inventory."
"Looking at the permit data, which is about what is even further into the future, we saw that that data was roughly flat," the economist says, explaining the data was "not quite as bad as you might expect, given the concerns the builders have about buyer traffic and tariffs and costs down the road."
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Overall, builders are "taking a wait-and-see approach, getting the permits, holding some optimism for the future, but not quite moving forward with projects, perhaps until they get a little bit more certainty," Hale says.
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This post was written by Naomi Buchanan.