Private residential construction spending rose by 1.5% in October, as reported by the latest U.S. Census Construction Spending data. Compared to the same month last year, there was a 6.4% increase.

The monthly growth in private construction spending mainly came from higher expenses on residential improvements. Spending on improvements jumped by 2.7% in October and was up by 18.5% from a year earlier.

Spending on single-family homes increased slightly by 0.8% for the month. This uptick follows a five-month decline from April to August and reflects growing builder confidence. Year-over-year, spending on single-family homes was 1.3% higher.

On the other hand, spending on multifamily construction broke a ten-month downward trend, rising by 0.2% in October. Despite this small gain, multifamily construction spending is still 6.8% lower compared to last year.

The NAHB construction spending index illustrates that single-family construction spending has slowed since early 2024 due to high interest rates. Growth in multifamily construction spending has also dwindled since its peak in July 2023. Meanwhile, spending on improvements has picked up since late 2023.

In the nonresidential sector, private construction spending increased by 3.5% year-over-year. This rise was largely driven by higher spending in manufacturing, totaling $32.9 billion, followed by the power category at $6.4 billion.

Click Here For the Source of the Information.

Strong demand for housing in the U.S. has put large homebuilders in a favorable position, while smaller builders are becoming targets for acquisition. Buyers include both domestic and Japanese firms.

This year, mergers and acquisitions in the single-family homebuilder sector are reaching record levels in terms of total dollar volume and nearly matching the number of deals, according to Margaret Whelan, founder of Whelan Advisory and a leading investment banker in the industry.

The largest builders are eager to expand. They want to enter new markets, offer a wider range of products, and improve their efficiency through acquisitions, Whelan explains.

So far this year, there have been 19 deals involving homebuilders. Whelan has four more in the pipeline before the year ends, with the potential for additional deals. Over the last five years, the average number of deals was just 12 annually.

This surge results from ongoing housing demand, which picked up at the start of the pandemic due to record-low mortgage rates and an increase in migration. However, those low rates also led to a significant housing shortage.

During the initial two years of the pandemic, homes sold quickly due to low rates. But when interest rates rose, many homeowners chose not to sell to avoid losing their low mortgage rates. This situation, often called the mortgage rate lock-in effect, has worsened the housing shortage.

Large homebuilders have gained from these trends, especially by offering incentives to reduce mortgage rates and attract buyers. Five years ago, builders represented one in six homes for sale. Now they account for one in three.

The biggest builders have increased their market share from 30% to 50%. Public builders have advantages over smaller private firms, as they can borrow at lower costs and often do not need loans for large acquisitions, according to Danielle Nguyen from John Burns Research and Consulting.

The trend includes not just American firms. Whelan noted that half of her deals this year involved Japanese buyers. They face slower growth in their home market and can access cheaper capital, allowing them to offer more competitive prices in the U.S. market.

Significant transactions this year include Japanese companies like Sekisui House acquiring MDC Holdings. This deal positioned Sekisui among the top five builders. Other names like Sumitomo Forestry and Daiwa House are expected to pursue similar acquisitions.

Whelan highlighted that Japanese companies excel in optimizing the homebuilding process. They often use 3-D imaging to plan homes and reduce waste by 20% to 30%. They also pre-cut materials in factories, making the building process more efficient.

Whelan expressed hope that these Japanese efficiencies could help make housing more affordable, similar to what they achieved in the U.S. auto industry.

M&A activity in homebuilding is likely to persist into next year, as transactions typically take time to finalize. The incoming Trump administration could also influence this growth.

President-elect Donald Trump has pledged to make more federal land available for homebuilding and may push state and local governments to ease zoning restrictions that limit development. However, he has also committed to mass deportations.

Click Here For the Source of the Information.

Homebuyers are reacting to lower mortgage rates and an increase in available homes. This has driven up mortgage demand recently, despite a decrease in refinancing applications

According to the Mortgage Bankers Association's seasonally adjusted index, overall mortgage application volume rose by 2.8% from the previous week, adjusted for the Thanksgiving holiday.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances, which are $766,550 or less, dropped to 6.69% from 6.86%. Points also fell from 0.70 to 0.67 for loans requiring a 20% down payment. This marks the lowest rate in over a month.

Mortgage applications for buying homes saw a 6% increase last week, the highest level since January. However, applications are still 21% lower compared to the same week last year, partly due to the change in Thanksgiving timing.

Joel Kan, an economist at the MBA, noted that the increase in purchasing activity is driven by lower rates and more homes available for sale, giving buyers greater choice than earlier this year.

Refinance applications dipped by 1% for the week and are down 7% from last year. Many current borrowers have financing at significantly lower rates than those available now.

Kan mentioned that while conventional refinance applications fell, FHA and VA refinance numbers improved compared to the previous week.

At the beginning of this week, mortgage rates continued to decrease slightly. Investors are balancing news from France and South Korea with positive economic remarks from several Federal Reserve officials.

More significant economic data is expected on Wednesday with the release of the ADP employment report and the ISM services index. Federal Reserve Chairman Jerome Powell will also participate in a discussion at The New York Times DealBook Summit.

Click Here For the Source of the Information.

Buy A Home During Colder Months

Timing is important for home buyers. The best time to look for a house is usually in spring and summer, right before the school year starts.

However, financial expert Dave Ramsey points out that buying in the colder months can still be a smart choice. He shares some practical tips for getting finances ready before making such a big purchase.

While the housing market typically slows down in winter, this lower competition can actually help buyers. Many sellers want to sell before the holidays and may offer better deals.

With fewer buyers, there's more room to negotiate. Lenders and real estate agents can also finalize transactions more quickly during this time.

Before starting the house hunt, Ramsey advises potential buyers to pay off credit card debt, student loans, and car loans, while also saving for emergencies.

Clearing all debts makes it easier to save for a big down payment, which is a vital part of buying a home.

A larger down payment leads to smaller monthly payments and less overall debt. Ramsey recommends aiming for a 20% down payment, though first-time buyers can get away with 5-10%.

Research supports this: paying down debts and boosting credit scores can lower mortgage rates by up to 2%.

Ramsey stresses the importance of affordability. Buyers should ensure that their monthly housing costs don't exceed 25% of their after-tax income.

Although mortgage rates haven't dropped much recently, they are lower than last year, indicating a positive market trend.

Experts predict that mortgage rates will slowly decrease early next year, suggesting that this winter may be a great time to buy a home.

Ramsey emphasizes that purchasing during the less competitive winter market can lead to significant savings.

The National Association of Realtors estimates that average home prices in January 2024 were $70,000 lower than in June 2024. This means winter buyers could enjoy much lower monthly mortgage payments, which is attractive for those on a budget.

Housing sales are expected to rise by 9% in 2025, signaling a potential increase in demand. Buyers waiting for mortgage rates to drop may want to act soon before competition grows.

Click Here For the Source of the Information.