New construction starts in the U.S. declined last month due to a slowdown in all three main construction sectors – commercial, residential and nonbuilding projects such as highways and power utilities. According to Dodge Data & Analytics, total new construction fell 10 percent. This follows a seven percent slide the month before.
Residential building in December was down eight percent from the previous month, dragged lower by a 15 percent drop in multifamily housing construction projects. Multifamily building construction ended 2018 up eight percent on an annual basis, rebounding from the eight percent decline that was reported for 2017.
Rising material costs and labor shortages are the primary culprits behind the declines. Stagnation in new home construction is likely to hinder momentum gained by recent increases in housing supply. Meanwhile, conventional conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.875 percent and the 5-year ARM is averaging 4.375 percent.
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