The reports were delayed last year due to the federal government shutdown. Tariffs on imported goods, including lumber and vanity cabinets, have pushed up material prices, while labor shortages amid an immigration crackdown are contributing to higher building costs, hampering activity. Permits for future single-family homebuilding fell 1.7% in December to 881,000 units. They increased from an 878,000-unit rate in October to a pace of 896,000 units in November.
Homebuilder sentiment worsened in February, a survey by the National Association of Home Builders showed Tuesday, with builders citing persistently high land and construction costs and still-high home prices relative to incomes amid hurdles.
The Trump administration has implemented measures to improve housing affordability, including the purchase of mortgage-backed securities and a ban on institutional investors buying single-family homes. Although mortgage rates have eased, progress has stalled as concerns over the federal government’s debt have kept US Treasury yields elevated.
Mortgage rates track the 10-year Treasury yield. Economists and realtors say more supply is needed to make housing more affordable. The government’s delayed advance estimate of fourth-quarter gross domestic product on Friday is expected to show residential investment rose for the fourth straight quarter.
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The economy is forecast to have grown at a 3.0% annual rate in the last quarter after expanding at a pace of 4.4% in the July-September quarter.
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