Finance

NAR economist highlights that home builders are ramping up production.

AifrontierMarch 28, 202504 mins

New home construction fell to a four-month low in November, declining by 1.8% from the previous month. Despite this drop, new home inventory remains at a 17-year high, and homebuilders remain optimistic about their outlook heading into 2025.

Table of Contents

Update on Home Sales Trends

Following yesterday’s interview with the National Association of Home Builders (NAHB) CEO Jim Tobin, National Association of RealATORS chief economist Lawrence Yun joins Brad Smithon Wealth to discuss his outlook for the housing market. Yun notes that home sales have been rising in recent months after remaining stagnant at the start of the year. He attributes this recovery to "We have more inventory… bringing out more buyers," he says.

The economist adds, "We know that the mortgage rate is not fully behaving as the Federal Reserve has been cutting rates. Mortgage rates stubbornly refusing to decline, but with the increase in inventory, more choices for consumers are bringing buyers back into the market."

He further explains, "That’s why it is critical that the builders ramp up production in the upcoming years. So I do believe that the builders need to produce more and will produce more." This sentiment reflects optimism among homebuilders despite recent challenges.

Conclusion

While new home construction has faced challenges recently, the robustness of the housing market is evident in the high levels of inventory available to builders. With optimism on the horizon, it appears that homebuilders are well-positioned to adapt to changing market conditions and continue their upward trajectory in 2025.

This report serves as a comprehensive overview of the current state of the housing market, highlighting both recent challenges and long-term opportunities for stakeholders in the industry.