U.S. Housing Indicators
High interest rates and a low supply of homes headlined the U.S. housing market in 2024. Despite three consecutive rate cuts in 2024, the average 30-year fixed-rate mortgage was 6.72% in December 2024. In response to the high-interest-rate environment, the number of single-family home starts marginally decreased by 2.1% in 2024.
Home prices across the nation are near all-time highs, driven by a lack of supply and outsized demand. Accordingly, many homeowners have opted to remodel their existing homes rather than buy a new property. U.S. housing affordability continues to be a topic of discussion – the average mortgage cost in November accounted for over 25% of household income, according to the Housing Affordability Index from the National Association of Realtors.
The Housing Market Index (HMI), a monthly measure of builder confidence, has steadily increased since August 2024 and is nearly 20% higher than the prior year. Higher builder confidence at the end of 2024 is largely attributed to anticipated regulatory relief in the industry after the U.S. presidential election in November 2024. For the multi-family market, the Q3 2024 survey of multi-family developers from the National Association of Home Builders (NAHB) reflected slight pessimism, with a Multi-family Production Index (MPI)* of 40, down 2 points YoY.
Canadian Housing Indicators
In November 2024, Canadian housing starts increased 25.5% from the prior year. When compared to October 2024, housing starts increased 9.2% MoM. The substantial YoY increase was predominantly driven by the significant uptick in multi-units starts, up 28.9% YoY. Over the past decade, multi-unit starts have accounted for ~75% of total Canadian housing starts. Single-detached starts experienced a YoY increase of 10.6%. Elevated levels of rental building construction, increased starts in Alberta and Québec, and heightened activity across the Atlantic provinces has led to the overall increase in total Canadian housing starts.
The value of authorized building permits in November 2024 increased YoY by 5.1%, mostly attributed to an 11.1% increase for nonresidential structures. MoM, the value of authorized building permits decreased by 5.9%.
