Note: Count of permits and Zillow Home Value index are through April 2023; S&P Case-Shiller and FHFA indexes are through February 2023.
Sources: U.S. Census Bureau, Standard & Poor’s, and Federal Housing Finance Agency (FHFA). All data sources accessed via Haver Analytics.
New permits to construct single-family homes (blue line) climbed for the third straight month in April, increasing 14 percent from their trough in January. This marks a partial reversal from their collapse during 2022 and reflects the surprising resilience of home prices (green, orange, and purple lines). Although the sharp run-up in interest rates has exerted strong downward pressure on prices, this pressure has thus far been offset by current homeowners’ reluctance to sell and give up their low-rate mortgages. As a result, home builders face less competition and so can maintain high profit margins.
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