U.S. single-family housing starts nationwide dropped for the second year in a row as high prices and mortgage rates diminished demand for new houses.
Builders started 946,536 single-family units last year, a 7% decline from 2022 and the lowest reading since starts topped 1.1 million in 2021, according to a new National Association of Home Builders analysis of U.S. Census Bureau data.
Not surprisingly, the Southeast led all nine census regions with 317,652 starts, but even that represented a 7% dip from 2022. In fact, starts declined in six of the nine census regions last year, with only New England posting an increase, of 9%. The Pacific and West South Central were essentially unchanged from 2022.
The largest decline in 2023 starts occurred in the Mountain region at 19%, followed by the Middle Atlantic at 17% and the East North Central at 12%.
Some of the nation's largest publicly held builders are reporting strong earnings based partly on the ability to buy down mortgage rates that average nearly 7%. But the most recent NAHB/Wells Fargo Housing Market Index showed builder confidence overall fell to the lowest level since December.
While buyers face affordability concerns, homebuilders have their own worries such as shortages of labor and buildable lots, NAHB Chairman Carl Harris said recently in a statement.