Residential Construction Soars, Boosting Housing Market Optimism

Residential construction is gaining momentum as homebuilders and developers adjust to higher mortgage rates. Single-family construction starts in November rose by 6.6% from the previous month, reaching the highest level since April 2022. Homebuilders have been building smaller houses and offering incentives to offset the impact of higher rates. Meanwhile, multifamily construction starts also increased, with November seeing the highest number of starts since July. Despite challenges in certain sectors, the economy has managed to grow at unexpectedly high rates, and a recession, which was anticipated for 2023, has not materialized.