New home construction in the United States drops for the first time in 4 months

New home construction in the United States drops for the first time in 4 months

Washington, February 18 (UNI/Sputnik) Construction of new homes in the United States fell in January, according to data from the US Commerce Department on Thursday which showed builders halted for the first time in four months as wood prices were rising. Housing starts, a measure of residential construction, fell 4.1% in January from December, to a seasonally adjusted annual rate of 1.638 million. This is the first monthly decline since the end of September. Prices for lumber, a key ingredient in residential construction, rose 39% in a row in November and December, although they fell 15% in January. The commodity resumed its rally in February, up 32% since the start of the month. Economists polled by US media had expected a decline of around 0.7% on average for January. While the steeper-than-expected decline rattled some, others remained convinced that the residential market‘s pace of growth was far from over. “It’s going to be a very busy construction season,” economist Adam Button said in a post on ForexLive, referring to the latest housing starts. The severe housing shortage in the United States since the financial crisis of 2007-2008 and measures to combat the coronavirus pandemic last year have caused a stampede among first-time home buyers, triggering record prices. To compound the problem, the Federal Reserve is expected to raise interest rates five to seven times this year to rein in inflation, which is growing at its fastest pace in four decades. It has heightened the race among early homebuyers keen to lock in before rate hikes take effect. Sales of new homes in the United States jumped 12% in December from the previous month as potential buyers flocked to the housing market ahead of the impending hike in interest rates. UNI/SPUTNIK GNK