November 28, 2023 | Driving It Home with ABoR's Housing Economist

In this episode of Driving It Home, Dr. Clare Losey and Kelea Youngblood discuss the impact of higher mortgage rates on new home construction. Dr. Losey explains that increased mortgage rates discourage builders due to higher borrowing costs and the potential decrease in demand from buyers challenged by affordability. Despite this, the Austin market has seen a slight rebound in new single-family home construction permits, suggesting a cautious optimism among builders who anticipate a normalization of mortgage rates. Comparatively, the Austin market is doing slightly better than the national average in terms of new construction. This discussion transitions into the broader topic of homebuilder confidence, which has been declining in the face of rising mortgage rates, reflecting a pessimistic outlook on the new home market. However, Austin's year-over-year increase in new single-family permits indicates a relatively stronger market performance. The podcast also addresses the costs of construction goods and services, which have risen significantly over the past several years. Despite a recent flattening of these costs, they remain high, which, coupled with higher mortgage rates, further constrains the affordability of new homes. The need for affordable housing is particularly acute in Austin, and both Dr. Losey and Kelea stress the importance of advocacy efforts to manage development fees and costs to ensure housing availability for all income levels. They conclude with a brief update on the weekly real estate statistics for Central Texas, noting a significant decline in closed sales and leases due to the Thanksgiving holiday, but with active listings remaining stable.  Links mentioned in this episode: Truth About Austin's Missing Housing Report https://www.abor.com/thetruth  Central Texas Housing Development Fees Analysis https://www.abor.com/document/2022-central-texas-housing-development-fees-analysis  The Driving It Home is now an official podcast, and you can tune in via ALL major podcasting platforms!  Don't forget to access your FREE Austin Business Journal subscription! Tap into this benefit exclusive for ABoR members and use it as a resource for lead generation and market insights.  Download the Audio Transcript + Episode Summary: https://www.abor.com/content/uploads/2023/11/DIH-11-28-23.pdf  Connect with us on socials: https://www.abor.com/socials  Connect with Dr. Clare Losey on LinkedIn: https://www.linkedin.com/in/clare-losey  Have feedback? Email us at [email protected].