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U.S. Homebuilders are slowing their roll. This weeks report revealed another drop in housing starts & home builder sentiment. 

U.S. housing starts & homebuilder sentiment reports are out this week, here is what you need to know. U.S. housing starts overall fell 2%, however this is primarily propped up by multi family housing. Multi family housing starts rose 15% as rising rents creates more incentives to build more rental units. However, this is in contrast to single family housing starts which dropped 8.1% to tune of 982,000 units in June, which is the lowest mark in two years. Building permits for single family homes, which is an indicator for future construction also dropped 8%.

Why you might ask? Mortgage rates....While we never know exactly what lies on the other side, rates have a huge impact on the real estate market. 

Looking at home builder sentiment, nothing is getting any prettier. Homebuilder sentiment fell to its lowest level since May 2020. The National Association of Home Builders Index fell to 55. For reference, anything below 50 is bad & anything above 50 is considered favorable. We were at a level of 67 last month so that represents a 12-point drop. 

Rates are going to play the most important roll in determining this years outlook for the real estate market. If rates stay fairly flat where they are, under that 3.5% on the 10 year treasury, I think the market will remain flat like it is. *This is contingent mainly on inflation figures over the next few months, think about how much the FED needs to hike rates to tame inflation* 

If Inflation keeps coming in hot and the bond market continues to price in more and more fear & the 10-year keeps climbing, you could see some more pain in the real estate market to come over the next few months. 

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Carson Hulak                             

Hulak Realty Group

Virtual Properties Realty



Thank you for your valuable time today


As always, I really look forward to working with you now or down the road..



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