Housing Starts Saw Stark Drop in December 2018

During the month of December in 2018, housing starts fell by nearly 12% compared to last month, according to The NAHB/Wells Fargo Homebuilders' Survey. Both single- and multi-family homes saw a drop during the year end.

The plunge likely came from fears around the Federal Reserve continuing to hike short-term interest rates, which they said will continue to happen but on a slower scale. Currently, markets predict there will be two to three more hikes in 2019, coupled with mortgage rates approaching 5% and threatened affordability risks.

Construction of new homes saw declines since March 2018, which Wells Fargo predicts is due to a lower demand for new homes, citing the American population struggling to afford a new home. Since the Fed decided to raise interest rates on a slower or even halted scale in 2019, the numbers for 2019 may see a rebound.

—Christie Citranglo, editorial associate