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Surge in US Housing: A Close Look at the November 2023 Boom
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Surge in US Housing: A Close Look at the November 2023 Boom

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12/21/2023
November 2023 saw a surge in US housing. Learn what's behind this big increase in home building.
November 2023 saw a surge in US housing. Learn what's behind this big increase in home building.
November 2023 saw a surge in US housing. Learn what’s behind this big increase in homebuilding.

What’s Happening in the Housing Market?

Last November, the US housing market saw a remarkable change. The number of new houses being built soared by 14.8%, reaching a level we haven’t seen since May. This increase was unexpected, especially by experts who track housing trends. According to the Commerce Department data, “housing surged 14.8% last month to an annual rate of 1.56 million units, the highest level since May”. This significant growth is exciting for potential homebuyers, offering more choices in a market that has been tight and challenging to navigate.

housing market november 2023
In November, the US housing market experienced a surprising 14.8% surge in new home construction, the highest since May, providing more options for homebuyers.

Why Is There A Surge In US Housing?

So, why the sudden increase? It’s mainly because it’s gotten cheaper to borrow money to buy houses. Mortgage rates, which is the interest you pay on a home loan, have gone down. This makes people more interested in buying homes. As Jeffrey Roach, a chief economist, said, “Falling mortgage rates also helped ignite demand. Mortgage rates are the lowest since July”.

The surge in US housing is largely due to the decrease in mortgage rates, making it more affordable for people to borrow money for home purchases.
The surge in US housing is largely due to the decrease in mortgage rates, making it more affordable for people to borrow money for home purchases.

Not Enough Old Houses, So We’re Building New Ones

The Shortage of Existing Homes

A major reason behind the current building boom is the scarcity of older, existing homes on the market. Potential buyers are actively looking for homes but are often disappointed by the limited choices available. This shortage has opened a window of opportunity for builders.

Builders Seize the Opportunity

Recognizing the high demand and low supply, builders are seizing the chance to construct new houses. This surge in construction is akin to manufacturers responding to a sell-out of a popular product by producing more. For both builders and homebuyers, this trend in the housing market is a positive development, offering a solution to the shortage and more options for buyers.

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The current surge in new home construction is driven by a lack of existing homes for sale, creating opportunities for builders to meet the high demand from buyers.
The current surge in new home construction is driven by a lack of existing homes for sale, creating opportunities for builders to meet the high demand from buyers.

Builders Are Feeling More Hopeful

Builders of houses are feeling a bit more hopeful these days. A special score that shows how builders feel, called the National Association of Home Builders/Wells Fargo Housing Market Index, went up a little bit after dropping in November. This is a good sign that builders are feeling better about the market.

House builders are becoming more optimistic as a key industry index shows improved confidence, signaling a positive shift in the housing market.
House builders are becoming more optimistic as a key industry index shows improved confidence, signaling a positive shift in the housing market.

What Does This All Mean?

This surge in US housing means a lot of new homes are being built, and it’s mainly because it’s cheaper to borrow money now. This is good news for people wanting to buy a house, especially those who found it too expensive before.

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