Mortgage demand hits lowest level since 1995 as new construction rebounds

Published

2 years ago

October 19, 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.

World

US ‘doesn’t have high expectations’ for Ukraine-Russia negotiations, Marco Rubio admits

Published

2 hours ago

May 16, 2025

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US 'doesn't have high expectations' for Ukraine-Russia negotiations, Marco Rubio admits

The United States “doesn’t have high expectations” for negotiations in Turkey between Russia and Ukraine to end the war, America’s top diplomat has admitted.

US secretary of state Marco Rubio said he did not think there would be a “breakthrough” in discussions until Donald Trump and Vladimir Putin meet to discuss it directly.

Russia and Ukraine are preparing to hold their first direct peace talks in three years, but the negotiations will take place in the aftermath of Mr Putin declining Volodymyr Zelenskyy‘s offer of an in-person meeting.

It came after Mr Putin proposed direct negotiations with Ukraine over the war “without any preconditions” after the “coalition of the willing” countries threatened Russia with fresh sanctions if it failed to take part in a 30-day ceasefire beginning on Monday. In response Mr Zelenskyy had called on Mr Putin to meet him in Istanbul.

Ukraine war latest: Trump teases ‘destination unknown’

The Ukrainian president said he was sending a team headed by his defence minister, from the Turkish capital Ankara to Istanbul, to meet the Ukrainian delegation, though he said Moscow’s team did not include “anyone who actually makes decisions”.

Mr Zelenskyy accused Moscow of not taking efforts to end the conflict seriously by sending a low-level negotiating team he described as “a theatre prop”.

Russian presidential aide Vladimir Medinsky, who is heading Moscow’s delegation, said: “The task of these direct negotiations with Ukraine is to establish long-term peace sooner or later by eliminating the root causes of this conflict.”

He later said he expected Ukraine’s representatives to turn up for the beginning of discussions on Friday morning.

Mr Rubio said he will meet Ukraine’s delegation on Friday, adding: “It’s my assessment that I don’t think we’re going to have a breakthrough here until the president [Mr Trump] and President Putin interact directly on this topic.”

The team sent by Russia “does not indicate a breakthrough”, he said, before going on to say: “I hope tomorrow the news says they’ve agreed a ceasefire. But it’s not my assessment.”

He was echoing remarks made by Mr Trump earlier in the day, when he said: “Nothing’s going to happen until Putin and I get together.”

Asked if any plans were under way for a meeting between the US and Russian leaders, Mr Rubio said Mr Trump was going to make a decision once his trip to the Middle East finishes.

Tens of thousands of soldiers have been killed on both sides in the war since Russia invaded Ukraine in February 2022, along with more than 12,000 Ukrainian civilians, according to the UN.

Russian forces are preparing for a fresh military offensive, Ukrainian government and Western military analysts have warned.

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Sir Keir Starmer accused Mr Putin of “standing in the way of peace”, with the prime minister saying: “There was only one country that started this conflict – that was Russia. That was Putin. There’s only one country now standing in the way of peace – that is Russia, that is Putin.”

Entertainment

US singer Chris Brown charged with GBH over alleged attack in London

Published

3 hours ago

May 15, 2025

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US singer Chris Brown charged with GBH over alleged attack in London

US singer Chris Brown has been charged with grievous bodily harm with intent in connection with a 2023 incident in London.

He remains in custody and is due to appear at Manchester Magistrates’ Court at 10am this morning, police said.

The charge relates to an assault which reportedly took place at a venue in Hanover Square in Mayfair on Sunday 19 February 2023.

The 36-year-old was arrested at a hotel in Manchester in the early hours of Thursday by detectives from the Metropolitan Police.

The Sun has reported that the R&B singer flew into Manchester Airport on a private jet on Wednesday afternoon.

Adele Kelly, the deputy chief crown prosecutor for CPS London North, said: “We have authorised the Metropolitan Police to charge Chris Brown with one count of grievous bodily harm, contrary to section 18 of the Offences Against the Person Act 1861.

“The alleged incident occurred in London on 19 February 2023.

“He will have his first court appearance on Friday 16 May at Manchester Magistrates’ Court.

“The Crown Prosecution Service reminds all concerned that criminal proceedings against this defendant are active and that he has the right to a fair trial.

“It is extremely important that there should be no reporting, commentary or sharing of information online which could in any way prejudice these proceedings.”

The Go Crazy singer is set to tour the UK in June and July, with dates at Co-Op Live in Manchester and Principality Stadium in Cardiff.

His representatives have been contacted for comment.

Environment

India’s Waaree to double its solar module output at its Texas factory [update]

Published

3 hours ago

May 15, 2025

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India's Waaree to double its solar module output at its Texas factory [update]

Waaree Texas solar — Photo: Waaree Energies

India’s Waaree Energies doubled Texas production in April to counter US solar tariffs – now it’s investing hundreds of millions more.

May 15, 2025: Waaree Solar Americas, a wholly owned subsidiary of Waaree Energies, has announced that it will invest an additional $200 million in battery energy storage. This raises Waaree’s total US solar and storage investment to $1.2 billion.

This expansion is expected to create 300 to 500 jobs over the next few years, adding to the 1,500 jobs it already announced.

Dr. Amit Paithankar, whole-time director and CEO of Waaree Energies, said that “our decision to invest was primarily driven by the significant market potential in the energy sector.”

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Despite tariff headwinds, Waaree is doubling down on its US expansion, drawn by the country’s massive energy demand and the surge in AI and data center development, both of which require steady, large-scale power. The company points out that solar is the “cheapest source of power and the fastest to commission,” making it a smart choice for scaling quickly.

April 16, 2025: It’s adding another 1.6 gigawatts (GW) of solar module manufacturing capacity at its Brookshire factory, bringing the site’s total to 3.2 GW. The company didn’t indicate a timescale for when the capacity increase would be complete. The move is part of its strategy to reinforce its “larger strategy of de-risking its global footprint.”

The company first announced it would open the Texas factory in December 2023, its first footprint in the US. Its original plan was to have an initial capacity to manufacture 3 GW of solar modules annually by the end of 2024.

Waaree plans to invest up to $1 billion to scale its annual solar panel production to 5 GW in Texas by 2027, which would make it one of the largest solar panel factories in the US.

Previous to manufacturing in Texas, the Mumbai-headquartered company, which is India’s largest solar module manufacturer, already supplied Indian-made solar panels to the US. But the US’s new reciprocal tariff on solar modules imported from India is 26%, adding to the existing 14.5% Section 201 tariff, bringing the total to around 40%.

“At a time when the world is redefining the rules of global trade, we’re not waiting for the dust to settle – we’re building through it. … The strength of our US order book is a testament to the trust we’ve built, and this expansion is a signal – we’re here, we’re growing, and we’re deeply invested in powering America’s energy future,” said Dr. Amit Paithankar, whole-time director and CEO of Waaree Energies.

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