Despite high construction costs and mortgage rate volatility on the horizon, residential contractors are optimistic about new-construction projects in 2023. The average 30-year fixed rate mortgage dropped to 6.1% in February after peaking at 7.08% in October, and roughly 80% of builders are already saying that slight boost in affordability is positively impacting business in the residential construction sector.
Though homebuying activity is expected to be sluggish in the months ahead, experts say home construction levels could rebound by late 2023 and into the start of 2024, Construction Dive reports.
“The nation continues to face a sizable housing shortage that can only be closed by building more affordable, attainable housing,” said Alicia Huey, NAHB chairman. “However, the two monthly gains for the HMI at the start of 2023 match the cautious optimism noted by the large number of builders at the recent International Builders’ Show in Las Vegas, who reported a better start to the year than expected last fall.”
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