US October single-family home construction down, new home supply at lowest level since 2008

Due to the impact of hurricanes "Helen" and "Milton" in the Southern United States, and despite a slight increase in construction permits, the number of single-family housing starts in the US plummeted significantly in October, due to the rise in mortgage rates. This indicates that the rebound may be restrained. The US Department of Commerce stated on Tuesday that the number of single-family housing starts, which account for the majority of home construction, dropped by 6.9% last month, with a seasonally adjusted annual rate falling to 970,000 units. The data for September was revised upward, showing that housing starts increased from the previously reported 1.027 million units to 1.042 million units. After being impacted by the rise in mortgage rates in the spring, new home construction has shown some recovery. However, its momentum is being limited by various factors, such as the low level of new housing supply in the US since 2008, the impact of hurricanes in the Southeastern US, and the persistently high borrowing costs. With the Fed cutting interest rates in September, mortgage rates initially declined. However, given the strong economic data and concerns about President Trump's policies (including tariffs on imported goods and large-scale deportations of immigrants) potentially reigniting inflation, mortgage rates have erased their previous declines. The yield on the 10-year US Treasury bond has risen to a five-and-a-half-month high, and mortgage rates closely follow this trend. Although the survey released by the National Association of Home Builders on Monday showed that the home builder confidence index rose to a seven-month high in November, this is mainly because builders "increasingly believe that with the Republicans in control in Washington, regulatory pressures on the industry will be significantly reduced."