Skip to content

Housing Construction Starts Edge Higher, Job Seeker Relocations Drop, Mortgage Applications Decline

Housing Construction Starts Edge Higher, Job Seeker Relocations Drop, Mortgage Applications Decline

Financial Health & Lifestyle Economic Development Community EAC News

What You Need To Know To Start Your Day

Housing Construction Starts Edge Higher

U.S. housing construction starts rose 2.2% in April from the prior month but were still down 21.1% from year-earlier levels as overall housing demand remained muted in a climate of high interest rates, the Commerce Department said.

The government reported a total of about 1.4 million construction starts, including 846,000 single-family projects and 542,000 starts in buildings with five or more units. Housing unit completions, at just over 1.3 million, were down 10.4% from the prior month but rose 1% from a year earlier.

The National Association of Home Builders trade group said Wednesday the April numbers point to a gradual improvement in what has been cooling interest among buyers, investors and developers in recent months.

The group’s chief economist, Robert Dietz, said a lack of existing single-family inventory available for sale has helped to push production in that category to its highest rate so far in 2023 “even as builders continue to deal with high construction costs, persistent labor shortages and tightening credit conditions for construction loans.”

In another potential bright spot on the multifamily side, which could help with affordability in some regions, Dietz noted there are now a total of 977,000 apartments under construction nationwide, the highest level since September 1973.

Job Seeker Relocation Drops

The percentage of job seekers willing to relocate fell to an all-time low in this year’s first quarter, as companies increasingly offer remote work options and prospective employees look to avoid rising housing costs in major employment hubs, according to outplacement firm Challenger, Gray & Christmas.

The firm said just 1.6% of job seekers in its latest survey relocated for new positions, down from 3.7% in the final quarter of 2022 and 4.6% in the first quarter last year. It is also much lower than the 7.5% of job seekers who moved for new jobs in the second quarter of 2020, in the early weeks of the pandemic, and 7.7% in the final quarter of 2018.

“In the 1980s and ’90s, nearly a third of job seekers would move for new positions,” Senior Vice President Andrew Challenger said in a statement regarding its national survey of 3,000 job seekers. “That has fallen steadily since, as housing costs have risen and companies have moved to where talent pools are located.”

Challenger said remote and hybrid positions are keeping workers at home, with the company’s survey showing 39% of 170 companies queried in the past month now offering fully remote work options. That’s down from 44% last fall and 61% from spring 2022.

“Hybrid work is becoming much more common, and job seekers who are holding out for fully remote may have to concede some time to the office,” Challenger said. The company said 32% of surveyed companies now report most of their workers are in the office, up from 13% last fall.

Challenger found 29% of workers at surveyed companies are in the office two days a week, 26% for three days and 13% for four days.

Mortgage Applications Decline

Mortgage application volume for the week ended May 12 decreased 5.7% from the prior week, the latest turn in what’s become an up-and-down pattern for home loan demand as interest rates have also been fluctuating in recent weeks, according to the latest survey by the Mortgage Bankers Association.

“Mortgage application activity slowed, as most mortgage rates in the survey increased, with the 30-year fixed rate jumping nine basis points to its highest level in two months at 6.57%,” Joel Kan, the trade group’s deputy chief economist, said in a statement Wednesday.

“Purchase applications decreased 5% to its slowest paced in a month, as buyers remain wary of this rate volatility, but also as for-sale inventory in many parts of the country remains scarce.” Purchase applications were down 26% from year-earlier levels, as other analysts note that prospective buyers including apartment renters are still waiting for lower home pricing and mortgage rates before committing to purchase a house.

The mortgage banker group reported that refinance applications declined 8% from the prior week and were down 43% from the comparable week of 2022.

Powered By GrowthZone