Jim WATSON / AFP via Getty Images
The Key Takeaways
- The sales of new houses dropped 17.3% in October, compared to the previous month.
- This downturn is likely to be due more to Hurricanes Helene, Milton and other short-term factors than it was caused by long-term economic influences.
- The homebuilders in the United States are hopeful about their future, but they are concerned about his plans to deport large numbers of workers.
Hurricanes Helene & Milton significantly slowed down homebuying in October, causing a steeper drop than expected.
The Census Bureau reported Tuesday that builders sold 610,000 new single-family houses in October. This is a decrease of 17.3% from September. According to Dow Jones Newswires’ and The Wall Street Journal’s survey of economists, this was far below what forecasters expected.
The slowdown in sales was primarily caused by the hurricanes which ravaged the South in September and October.
"We expect sales to rebound from their October pace in the months ahead as rebuilding in the South gets underway," Nancy Vanden Houten, lead U.S. economist at Oxford Economics, wrote in a commentary.
What could be the impact of the election on the housing markets?
The future of the home construction market is at a turning point as the government prepares to once again hand the White House's keys to Donald Trump.
In November, after Trump won the election, optimism among builders soared as they anticipated that Trump’s tax cuts promised to wealthy buyers would boost their purchasing power. But builders also warn that Trump’s plans to expel illegal immigrants will decimate their workforces and drive prices up.
It is also possible that the direction of the entire economy will change if builders build more homes in order to ease a chronic housing shortage. Housing economists claim that the country’s housing deficit, which was created after the 2007 real estate crash, is causing all sorts of economic issues, beginning with the high cost of homes hurting renters’ and buyers’ budgets.
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