Mortgage demand hits lowest level since 1995 as new construction rebounds

Published

2 years ago

October 30, 2023

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US single-family homebuilding rebounded in September, boosted by demand for new construction amid an acute housing shortage, but the highest mortgage rates in nearly 23 years could slow momentum and delay the overall housing market recovery.

That was flagged by other data on Wednesday showing applications for loans to purchase a home plunged last week to levels last seen in 1995. In addition, the jump in housing starts partially recouped the decline in August.

The rebound in homebuilding probably reflected permits approved several months ago before mortgage rates broke above 7%. A survey this week showed confidence among single-family homebuilders slumped to a nine-month low in October, with builders reporting lower levels of traffic.

“In the very short-term, single-family construction activity is likely to increase with permits rising in every month of 2023 thus far, but at some point mortgage rates are likely to put a lid on new construction activity for home purchase,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

Single-family housing starts, which account for the bulk of homebuilding, increased 3.2% to a seasonally adjusted annual rate of 963,000 units last month, the Commerce Department said. Data for August was revised to show starts dropping to a rate of 933,000 units instead of 941,000 units as previously reported.

Single-family starts rose in the Midwest, West and the densely populated South, but plunged 19.0% in the Northeast.

The housing market had shown signs of stabilizing before mortgage rates resumed their upward trend late in the summer, with the rate on the popular 30-year fixed mortgage vaulting above 7% in August. According to the Mortgage Bankers Association, the average contract interest rate on a 30-year fixed-rate mortgage rose 3 basis points to 7.70% last week, the highest since November 2000.

Mortgage rates have risen in tandem with the yield on the benchmark 10-year Treasury note, which has spiked to more than a 16-year high, mostly because of expectations that the Federal Reserve will keep interest rates higher for longer in response to the economy’s resilience. Since March 2022, the central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range.

Residential investment has contracted for nine straight quarters, the longest such stretch since the housing market bubble burst, triggering the 2008 global financial crisis and the Great Recession. That downturn probably extended into the third quarter, though overall gross domestic product growth last quarter was likely the fastest since late 2021, thanks to a tight labor market that is underpinning consumer spending.

Stocks on Wall Street were trading lower amid mounting tensions in the Middle East. The dollar rose against a basket of currencies. U.S Treasury prices fell, with the yield on the 10-year bond rising to the highest level since July 2007.

Financial markets expect the Fed will leave rates unchanged at its Oct. 31-Nov. 1 policy meeting, according to CME Group’s FedWatch Tool, given the surge in Treasury yields.

Starts for housing projects with five units or more soared 17.1% to a rate of 383,000 units in September. Overall housing starts accelerated 7.0% to a rate of 1.358 million units in September. Economists polled by Reuters had forecast starts rebounding to a rate of 1.380 million units.

Permits for future construction of single-family homes rose 1.8% to a rate of 965,000 units, the highest since May 2022. Though permits are a leading indicator, economists cautioned against being too optimistic about homebuilding prospects, citing the soaring mortgage rates and souring builder sentiment.

“It’s not lights out for homebuilding, but we don’t know how many more body blows with the Fed’s interest-rate hammer the nation’s housing sector can withstand,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

UK

Fireball at Southend Airport after small plane crashes

Published

3 hours ago

July 13, 2025

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Fireball at Southend Airport after small plane crashes

A small plane has crashed at Southend Airport in Essex.

Essex Police said it was at the scene of a “serious incident”.

Images posted online showed huge flames and a large cloud of black smoke, with one witness saying they saw a “fireball”.

A police statement said: “We were alerted shortly before 4pm to reports of a collision involving one 12-metre plane.

“We are working with all emergency services at the scene now and that work will be ongoing for several hours.

“We would please ask the public to avoid this area where possible while this work continues.”

It has been reported that the plane involved in the incident is a Beech B200 Super King Air.

According to flight-tracking service Flightradar, it took off at 3.48pm and was bound for Lelystad, a city in the Netherlands.

One man, who was at Southend Airport with his family around the time of the incident, said the aircraft “crashed headfirst into the ground”.

John Johnson said: “About three or four seconds after taking off, it started to bank heavily to its left, and then within a few seconds of that happening, it more or less inverted and crashed.

“There was a big fireball. Obviously, everybody was in shock in terms of witnessing it. All the kids saw it and the families saw it.”

Mr Johnson added that he phoned 999 to report the crash.

Southend Airport said the incident involved “a general aviation aircraft”.

Four flights scheduled to take off from Southend this afternoon were cancelled, according to its website.

Flightradar data shows two planes that had been due to land at Southend were diverted to nearby airports London Gatwick and London Stansted.

Essex County Fire and Rescue Service said four crews, along with off-road vehicles, have attended the scene.

Four ambulances and four hazardous area response team vehicles are also at the airport, as well as an air ambulance, the East of England Ambulance Service said.

Its statement described the incident as “still developing”.

David Burton-Sampson, the MP for Southend West and Leigh, posted on social media: “I am aware of an incident at Southend Airport. Please keep away and allow the emergency services to do their work.

“My thoughts are with everyone involved.”

Local councillor Matt Dent said on X: “At present all I know is that a small plane has crashed at the airport. My thoughts are with all those involved, and with the emergency services currently responding to the incident.”

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World

Meredith Kercher’s killer faces new trial over sexual assault allegations

Published

4 hours ago

July 13, 2025

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Meredith Kercher's killer faces new trial over sexual assault allegations

The man convicted of the murder of British student Meredith Kercher has been charged with sexual assault against an ex-girlfriend.

Rudy Guede, 38, was the only person who was definitively convicted of the murder of 21-year-old Ms Kercher in Perugia, Italy, back in 2007.

He will be standing trial again in November after an ex-girlfriend filed a police report in the summer of 2023 accusing Guede of mistreatment, personal injury and sexual violence.

Guede, from the Ivory Coast, was released from prison for the murder of Leeds University student Ms Kercher in 2021, after having served about 13 years of a 16-year sentence.

Since last year – when this investigation was still ongoing – Guede has been under a “special surveillance” regime, Sky News understands, meaning he was banned from having any contact with the woman behind the sexual assault allegations, including via social media, and had to inform police any time he left his city of residence, Viterbo, as ruled by a Rome court.

Guede has been serving a restraining order and fitted with an electronic ankle tag.

The Kercher murder case, in the university city of Perugia, was the subject of international attention.

Ms Kercher, a 21-year-old British exchange student, was found murdered in the flat she shared with her American roommate, Amanda Knox.

The Briton’s throat had been cut and she had been stabbed 47 times.