As a prospective homebuyer, you should be thrilled about the most recent news from the US housing market! In May, single-family home construction in the country took an unprecedented leap, the likes of which we haven't seen in over three decades. Moreover, the trend of permits for future construction also followed suit. What this suggests is that the housing market might just be stepping out of the shadow of Federal Reserve interest rate hikes and making its way towards a brighter future.
Even though the Federal Reserve decided to take a break this month from their regular rate hikes (the first pause since 2022), the process of credit conditions tightening remains in motion. This development might pose a challenge for builders who depend heavily on construction and development loans to keep up with May's rebound in the upcoming months.
Interestingly, the May upsurge in housing starts can be largely attributed to multi-family construction projects that secured their financing last year. While this momentum is predicted to level off as the year progresses (owing to the increasing challenges in obtaining new financing), the improvement in figures is encouraging.
A statistical analysis reveals an impressive annual rate of 1.631 million housing units started in May, jumping from April's 1.34 million. The figure for May is, in fact, the highest observed since April 2022, which itself was the peak since 2006.
But what does this mean for you as a homebuyer in Portland, Oregon, or Vancouver, Washington?
These increasing numbers suggest that the market is responding positively to the demand for new homes, which is fantastic news if you're looking to buy. More construction equates to more options on the market, potentially making your home search in Portland or Vancouver more fruitful.
While some economists aren't fully convinced that this upward trend is here to stay, the figures speak for themselves. Housing starts have risen significantly in the South, Midwest, and West, which hints at the potential for a similar trend in the Pacific Northwest.
Most notably for those considering buying a home in Portland, Oregon, or Vancouver, Washington, the National Association of Home Builders/Wells Fargo Housing Market index has shown a marked increase, indicating that the availability of newly constructed homes is on the rise.
Importantly, the average rate on the popular 30-year fixed mortgage has lowered slightly from the high above 7% last November, averaging 6.77% in the most recent week. A lower mortgage rate means you could potentially secure a better deal on your new home.
There's never been a better time to start your home search in Portland, Oregon, or Vancouver, Washington. With the increase in new construction and more favorable mortgage rates, your dream home might be closer than you think!
Ready to take the plunge? I'm here to help! As your reliable realtor, Peter Cutile, I'm excited to assist you in finding your dream home in Portland or Vancouver. Don't wait for your dream home to find you – reach out today and let's make your home ownership dream a reality!
Complete report available at: https://www.reuters.com/markets/us/us-housing-starts-surge-13-month-high-2023-06-20/?distinct_id=3A6r3evR9&user_email=peter%40petercutile.com
