On Friday, the United States Census Bureau made an announcement about the start of the construction of an estimated 923,400 housing units in the year 2014. As many may know, this is far below the forecasts made by a number of analysts for 2013 and is also far below what is considered the long term annual average of the start of up to 1.5 million construction units. There are a number of factors, which include the lack of lots wherein they can begin these constructions, as well as the inaccessible labor markets of particular regions, as per various economic analysts as well as home builders. What has been pointed out as one of the more major reasons for this low level of performance is the rise of 1% in interest rates for mortgages between the months of May and September which severely crippled the demand for new housing.
According to the chief economist for the National Association of Home Builders (NAHB), David Crowe, builders for these constructions could have definitely overcome any of the various difficulties they were facing with supply but were unable to, since this increase in the rates of interest on mortgages weakened demand among prospective consumers. The only forecasters who were even close to this figure were cited as being rather conservative, that is, till the results came out.