Homebuilding is taking a hit from interest rates
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U.S. metro areas are on track to permit fewer new housing units than last year, according to Census Bureau data.
Why it matters: That's a problem for people facing steep housing prices. Experts estimate America is short over 3 million units of housing, either to rent or to buy.
The big picture: Higher interest rates for loans are slowing new home and apartment construction, according to the National Association of Home Builders.
- Labor and lot shortages are also weighing on builders, per the group's latest survey.
Yes, but: Homebuilding has proved resilient, partly because there's low inventory of existing houses for sale, Axios' Neil Irwin reports.
- 1.3 million total units were permitted in 2023 — most of which (60%) were single-family homes, the data shows.
Between the lines: Some areas, particularly fast-growing Southern metros, are seeing more homebuilding than others.
- Cape Coral, North Port and Lakeland, all in Florida, are projected to lead large metros this year in total new units permitted per capita.
What we're watching: A cascade of new apartments, financed when interest rates were lower, helped recently to slow rent growth.
- With the peak of the construction wave behind us, per an analysis from real estate services firm Cushman & Wakefield, landlords could raise rents.
