LAS VEGAS — The United States may be short of homes, but builders keep on building. But where are these new homes coming up?
Research from the National Association of Homebuilders (NAHB) reveals that the top five markets where builders are building the most single-family homes.
The NAHB looked at permits issued through November 2022 and compared it to the year before.
- Houston, Texas
- Dallas, Texas
- Phoenix, Ariz.
- Atlanta, Ga.
- Austin, Texas
All these five markets posted declines, which shows the extent to which buyer demand has slowed.

These are the markets where the highest number of building permits have been issued for single-family housing.
Screenshot from NAHB presentation.
The number of permits applied in Houston fell by 6% in November 2022 compared to the year before; they also fell by 11% in Dallas and by 21% in Phoenix.
Even though the pace of permits being applied for new construction has slowed, Houston and Dallas alone are building 40% more homes than those being currently built in the whole of California, Dietz said.
Dietz said areas of the country driven by good affordability or underlying population growth continue to show strength in single-family homes. In fact, more than half of the single-family construction that’s being planned is located in the south, he added.
“That’s not to say there are pockets of strength elsewhere in the United States,” Dietz stressed. He cites the I-70 corridor, which includes cities such as Columbus, Indianapolis, St. Louis and Kansas City and “pockets of strength” in the Midwest, in places like Des Moines.
“It doesn’t surprise me, these are the areas where you can build unlike many other areas,” Selma Hepp, chief economist at CoreLogic, said in an interview on the sidelines of the International Builders show organized by the National Association of Home Builders in Las Vegas.
“These are the areas that have ranked in the top for the past few years — even before the pandemic,” she added.
Write to Aarthi Swaminathan at aarthi@marketwatch.com
DALLAS, Jan. 31, 2023 /PRNewswire/ — The Comerica California Economic Activity Index declined 4.9% annualized in the three months through October. The Index has turned lower after robust increases in the first half of the year, but was still up 5.7% from a year-ago in October.
Four of the nine components that constitute the Index rose in October. Employment rose by 59,800, but continuing claims for unemployment insurance rose, too, for the fourth consecutive month, after falling in the first half of the year. California’s unemployment rate, which fell nearly 2 percentage points in the first seven months of the year, rose in October. The unemployment rate is likely to rise further in the coming months, as key sectors like tech face strong headwinds. Electricity consumption by California’s industrial sector declined another 0.9% in October after falling 3.0% in the third quarter.
Housing starts fell 13.0% in October. House prices fell for the fifth consecutive month and were down 7.2% from May. Housing affordability is a longstanding problem in California and has gotten worse as first home prices and then interest rates surged post-pandemic. Declines in house prices and weak residential investment are likely in 2023. The travel industry lost momentum as it entered the fourth quarter. The seasonally-adjusted hotel occupancy rate fell 2.4 percentage points in October following a 3.6 percentage point decline in the third quarter. Seasonally adjusted air passenger traffic was down 7.1% in October after an 8.7% contraction in the third quarter.
California’s economy is expected to soften in the coming months, as it faces several headwinds from a weakening housing sector, high interest rates and inflation, and slowing consumer spending. On top of these issues that weigh on state economies across the U.S., the tech slowdown is an additional negative for the Golden State.
The Comerica California Economic Activity Index is a monthly composite indicator of state economic activity. The Index provides a wholistic advance view of the state of California’s economy, using economic data that are available about one quarter earlier than real GDP is released. The index is comprised of nine components: Nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house prices, industrial electricity sales, foreign trade, enplanements, hotel occupancy, and state revenues. All data are seasonally adjusted with nominal values converted to constant dollar values as appropriate. To filter out month-to-month volatility in the index components, the index is calculated from the three-month moving averages of its components. Values for a minority of components are projected from the prior months’ release due to the timing of data releases.
Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Michigan, California, Florida and Arizona. Additionally, Comerica has select businesses operating in Canada and Mexico. Comerica reported total assets of $85.4 billion as of Dec. 31, 2022.
To subscribe to our publications or for questions, contact us at [email protected]. Archives are available at www.comerica.com/insights.
SOURCE Comerica Bank
Hi, MarketWatchers. Don’t miss these top stories.
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The real-estate sector is in a quandary.
The housing market was a wild rollercoaster ride that ended with a big fat splat last year, with mortgage rates doubling and demand plummeting.
Home sellers aren’t keen on listing their homes, given that they’ve recently secured an ultra-low mortgage rate. Home buyers, as a result, are struggling to find good options as the number of homes for sale remains low.
So where will the supply come from, to meet buyers’ demand? And what happens if a recession hits? Will home prices fall?
MarketWatch spoke with Doug Duncan, senior vice president and chief economist at Fannie Mae
FNMA,
in a video interview.
Duncan’s team, which is the economic and strategic research group at Fannie Mae, recently published its economic and housing forecast.
MarketWatch: What happens if the U.S. Federal Reserve raises interest rates to 5.5%? What does that mean for the housing market?
Duncan: The housing sector has a very well established relationship with monetary policy. It’s one of the most interest-rate sensitive sectors, if not the most interest rates in the sector.
We made our first call on the recession [to occur this year]. We looked ahead and we said, if things unfold over the next 9 to 12 months in the following way, we think we’ll have a mild recession in 2023. That looks like it’s a pretty good call. It’s possible it could be a soft landing.
Our base case is something in the neighborhood of a 0.5% to 1% decline in GDP over 2023.
“‘We think we’ll have a mild recession in 2023.’”
And part of the reason we expect it to be mild is housing because we haven’t solved the supply problem. Millennials are not done buying houses.
The demand-and-supply characteristics are there for a recovery if interest rates come down.
MarketWatch: We keep talking about this problem of not having enough homes on the market for sale, and that we aren’t building enough new homes. When will supply improve? Where will these homes come from?
Duncan: It’s gonna come from home builders, until boomers age to a level where they’re forced to give up their home.
One of the things about the boomers that they’ve been very consistent on, is [to say] we intend to age in place. The 75-plus portion of our population has a 78% homeownership rate. There’s a lot of owned homes in that population group.
And of course, they’re going to face mortality, as we all will. So that’s really the biggest driver of things related to mortality that will force them out of those homes that would put that back into supply.
But they’re a healthier group than generations before them. They’re living longer.
So that puts [supply] on the back of builders. But the builders are up against affordability issues from a development perspective because of local zoning issues.
MarketWatch: Are you concerned about this resistance to people returning to work, and the impact on commercial real estate?
“‘Businesses are going to evaluate remote work.’”
Duncan: Businesses are going to evaluate remote work, and they’re going to say, we’re letting workers work remote so that reduces their commuting costs, which is actually a real income gain for them. Because they don’t have to pay for the wear and tear of the car or the subway.
Not all [remote] workers are coming back to that space, and some of that space is going to be reduced in price or in value. And that will show up in defaults and delinquencies, or the sale of a property at a loss.
In the cities with a big central business district like San Francisco or New York City or Chicago, it might be more significant [than] say Indianapolis or Dallas or places where there’s a lot more developable land.
MarketWatch: You changed your forecast for housing. Now you expect home prices to fall 6.7% in the next two years, which is more than you previously estimated. What was the reason for that?
You can look and see where [houses] were withdrawn from availability and re-listed at a lower price. That gives you an idea of whether price declines are taking place in that market.
Markets that saw the most rapid appreciation are seeing the most rapid decline. You are probably seeing more declines in the San Jose area than in Indianapolis.
Households that bought recently are the ones that are probably at some risk, although when they bought, they probably got a very low interest rate. So they have to make a decision: Do I give up his 3.5% interest rate because prices fell 20%? Well, if I’m gonna live in the house, does it really matter?
This interview has been edited and condensed for style and clarity.
By Robb M. Stewart
OTTAWA–New-house prices in Canada are projected to be muted this year after holding steady in December following three straight months of declines.
Elevated mortgage rates in the country, and the risk of further increases in 2023, coupled with a fall in lumber prices should continue to cool prices for new houses, at least during the first half of the year, Statistics Canada said Monday.
New-home prices rose 7.7% nationally in 2022–with a fall toward the end of the year as a jump in mortgage rates following a string of central bank policy-rate increases curbed demand–cooling from growth of 10.3% in 2021, the data agency said.
Statistics Canada’s new-house price index was unchanged in December from the month before, and was up 3.9% from a year earlier. Prices declined 0.4% from July to December after rising early in the year, the agency said.
A big driver of economic growth in 2021, Canada’s housing market cooled last year as the Bank of Canada drove one of the most aggressive rate-rising campaigns among developed-world central banks in an effort to tackle inflation. The bank raised its main interest rate by 4 percentage points over the course of the year to 4.25%, the highest level in almost 15 years, but has signaled it is at or near the end of its tightening campaign. The bank is set to decide monetary policy on Wednesday, and most economists forecast a further one-quarter percentage point increase.
Last week, the Canadian Real Estate Association said sales of existing homes edged 1.3% higher in December from the previous month, but remained sharply below the level of sales recorded a year earlier, while new listings were down 5.7% for the month. The association projected the number of properties that trade hands in 2023 will slip by 0.5% after a drop of about 25% in 2022, while average prices are expected to fall 5.9% after rising 2.4% last year.
Statistics Canada said lower softwood lumber prices, which were down 57.3% in December from a high in March, and higher mortgage rates are expected to weigh on new home prices this year. However, as mortgage rates stabilize and uncertainty in markets calms, housing demand and prices should edge up in the latter half of 2023. This and other factors, including increased immigration targets for Canada and continued inter-provincial migration, could lead to price increases for new homes, it said.
The new-house price data from Statistics Canada covers single-dwelling, semi-detached and row houses. It doesn’t incorporate prices for newly built condominium units.
Write to Robb M. Stewart at robb.stewart@wsj.com
Last Updated: Jan. 21, 2023 at 2:48 p.m. ET
First Published: Jan. 20, 2023 at 9:24 a.m. ET
Even as mortgage rates come off of recent highs, buyer demand remains constrained. And that’s affecting listing and asking-price decisions among sellers, according to a new report.
The report by Redfin RDFN, which tracked home-sale prices for the four weeks ending Jan. 15, found that the median price of a house sold in the U.S. was up 0.9%…
Even as mortgage rates come off of recent highs, buyer demand remains constrained. And that’s affecting listing and asking-price decisions among sellers, according to a new report.
The report by Redfin
RDFN
,
which tracked home-sale prices for the four weeks ending Jan. 15, found that the median price of a house sold in the U.S. was up 0.9% from a year ago, at $350,250.
While home prices on a national level hold steady, property markets in some parts of the country are showing weakness.
Prices of homes sold fell on a year-over-year basis in 18 of the 50 most populous metro areas in the U.S., with San Francisco leading the way. In San Francisco, selling prices were down 10.1% from a year earlier, Redfin said.
That sale-price decline was followed by that of nearby San Jose, Calif., where prices fell by 6.7%. Austin, Texas, saw home-sale prices drop by 5.5%, and Detroit by 4.3%.
Phoenix, a boomtown earlier in the pandemic, saw home-sale prices fall by 3.7%.
The median asking price of newly listed homes in the 50 top U.S. metropolitan areas was $357,200, up 3.9% year over year, the biggest increase in two months, though the median listing price verged on $400,000 last spring.
A drop in mortgage rates has prompted some buyers to rush into the market. The rate on a typical 30-year fixed-rate mortgage fell to 6.15%, Freddie Mac said on Thursday.
Mortgage demand has surged 28%. The Redfin report identified a 25% rise in mortgage applications over the week ending Jan. 13.
But mortgage payments are still high compared with a year ago. The monthly payment for a median-priced home is $2,262, Redfin said. Monthly mortgage payments are up 30% from a year ago.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com
Text size

All eyes are on mortgage rates as they start to retreat from 2022’s peak above 7%.
Justin Sullivan/Getty Images
Indicators of new home construction in December were mixed—but builder sentiment offers some reason for optimism in the coming months.
Construction was started on new homes at a seasonally-adjusted annual rate of about 1.38 million, 1.4% below November’s revised rate of 1.4 million, according to data released today by the Census Bureau and the U.S. Department of Housing and Urban Development.
FactSet
consensus estimates had expected a steeper drop, to roughly 1.36 million.
Single-family starts increased from the month prior, rising 11.3% to a rate of 909,000. The percentage increase in single-family starts was the largest since November 2021, according to historic data.
Permits, a forward-looking indicator of future construction, fell 1.6% month-over-month to a seasonally-adjusted annual rate of 1.33 million. Single-family permits fell for the 10th month in a row, dropping 6.5% from November to a rate of 730,000.
December’s data capped off a year of rapid change in the housing market as higher mortgage rates and home affordability hurdles weighed on buyers. About 1.55 million homes were started in 2022, representing a roughly 3% decrease from 2021. Roughly 1.65 million homes were authorized, representing a decline of 5% from 2021. For both metrics, it was the first year-over-year decline since 2009, according to historic data.
The construction data for December is comes a day after the National Association of Home Builders released its January builder sentiment survey. The latest survey showed that builder confidence improved for the first time since December 2021 as mortgage rates fell.
“It appears the low point for builder sentiment in this cycle was registered in December, even as many builders continue to use a variety of incentives, including price reductions, to bolster sales,” Jerry Konter, the association’s chairman, said in a Wednesday statement. “The rise in builder sentiment also means that cycle lows for permits and starts are likely near, and a rebound for home building could be underway later in 2023.”
Moving forward, all eyes are on mortgage rates, which have remained below 2022’s peak above 7% so far in 2023. The latest
Freddie Mac
data on mortgage rates is set for release on Thursday. Last week’s reading showed that the average rate was 6.33%, representing a decrease of 0.15 percentage points from the week prior.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
Dear MarketWatch,
I’m from New Jersey. My daughter and I are looking to invest in a multi-family unit for our family. I’m retired and live in a luxury apartment paying $2,000 a month for rent, soon to increase to $2,200.
My daughter is a homeowner and her property currently has $75,000 to $100,000 in equity.
We would like to know if it would make sense for my daughter to sell her home (she would make at least $75,000 at the rates homes are selling in her area), and we move together into a rental home for $3,300 a month, and plan to wait a year for the housing prices to go down before purchasing a multi-family?
Thank you.
Timing the market
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
Dear Timing,
Given the headwinds in the housing market right now, I’d say, go for it: Sell now, and slowly start looking for a home to buy.
As a buyer, the environment isn’t great. The number of homes for sale is low, as homeowners are locked in to ultra-low mortgage rates. They’re not going to give that up easily, so you have few options. That will also keep prices relatively high in New Jersey.
Plus, mortgage rates are still above 6% still, which means you’re gonna have to budget for higher monthly payments.
Interest rates may fall this year. “I think 2023 will be a year of volatility. The economy is already performing better than many expected, which is giving the Fed less of an incentive to cut rates,” Mohannad Aama, a portfolio manager at Beam Capital, recently told MarketWatch.
But as a seller, this same environment presents a great opportunity.
“We have an extreme lack of inventory that is causing the market to favor sellers at almost every price point,” Melissa Rubenstein, a Realtor for Christie’s Real Estate New Jersey, told MarketWatch.
“‘We have an extreme lack of inventory that is causing the market to favor sellers at almost every price point.’”
But do adjust your expectations. The house may not fetch the price you both have in mind. According to one study by Wharton, some homeowners list their home prices higher than the market rate. As a result, homes stay on the market longer and, as the Wharton report notes, listing a house at above the market rate creates a “psychological dependence on the original purchase price [and] generates an aversion to losses that is 2.5 times larger than the prospect of gains.”
Timing the sale before the spring may work out for you. Spring is generally the start of the home-shopping season.
“I would take advantage of that situation and get the most money possible for your daughter’s home before any rush of inventory in the spring,” Rubenstein added.
So yes, it may make sense to move ASAP on selling the home. But wait before you buy, either for rates or prices to drop, or inventory to rise.
Plus, homeowners are starting to turn to the rental market for cash flow, so you may actually get a discount on rents too, in New Jersey.
But be warned: There are no guarantees when trying to time the market.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Credit researchers at Goldman Sachs now expect home prices in several “overheated” metro areas to fall over 25% from peak levels.
Metro areas included in their forecast were San Jose, Austin, Phoenix and San Diego, according to a new home-price outlook from a Goldman research team led by Lotfi Karoui.
Some of the markets at risk for the biggest price drops this year (see chart) already saw at least a 10% depreciation in home price growth, according to the Goldman team.

Austin, San Francisco, San Diego and Phoenix to see biggest home price declines in 2023.
Zillow, Goldman Sachs Global Investment Research
While sharp price drops could present “localized risk of higher delinquencies for mortgages originated in 2022 or late 2021,” declines aren’t expected to be as big of a threat everywhere.
Nationally, the Goldman team expects home prices to fall by roughly 10% this year from June 2022 levels, following their roughly 4% estimated decline in the second half of last year.
“This decline should be small enough to avoid broad mortgage-credit stress, with a sharp increase in foreclosures nationwide seeming unlikely,” the team wrote.
U.S. real-estate activity has fallen off a cliff since the Federal Reserve began jacking up rates in March to tame high inflation. Home prices, however, also rose 40% since March 2020, according to Deutsche Bank.
The new Goldman home-price forecast hinged on an expectation that interest rates will remain elevated for longer. The team said their year-end forecast for the 30-year fixed-rate mortgage was revised higher by 30 basis points to 6.5%, but they expect it to retreat to 6.15% in 2024.
“This path would cause affordability to worsen incrementally, after a slight improvement over the past two months,” the team said, with home prices likely to shift to a 1% appreciation in 2024 if the U.S. economy avoids a recession.
U.S. stocks rose for a second straight session Wednesday, a day before an update on consumer inflation is expected to show a monthly decline in the annual rate to 6.5% from a 9.1% peak this summer. The Dow Jones Industrial Average
DJIA,
gained 0.8% Wednesday, the S&P 500 index
SPX,
rose 1.3% and the Nasdaq Composite Index
COMP,
advanced 1.8%.
Read: Why Thursday’s U.S. CPI report might kill stock market’s hope of inflation melting away