
Housing starts decline; Group opposes planned rail merger; Mortgage applications increase
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Housing starts decline
August’s U.S. construction starts for housing declined 8.5% from the prior month and fell 6% from a year earlier, as builders cited continued challenges with building costs and financing rates. The Commerce Department and Department of Housing and Urban Development Wednesday said residential projects were started at a seasonally adjusted annual rate of about 1.3 million units.
Analysts at the National Association of Home Builders noted the 890,000 single-family starts were down 4.9% on an annual basis and posted their lowest reading since July 2024. The multifamily category, including apartment buildings and condos, decreased 11.7% from a year earlier at 417,000 unit starts.
“Housing affordability is hurting buyer traffic for builders, and as a result builders have slowed single-family home construction,” NAHB Chairman Buddy Hughes said in a statement. “Nonetheless, our latest survey shows builders reported an increase for future market expectations as mortgage rates have posted a modest decline in recent weeks.”
With this week’s Federal Reserve interest rate cut, its first in nine months with potentially more ahead, NAHB Chief Economist Robert Dietz said a return to monetary easing “will help the mortgage market indirectly and lead to lower interest rates for building and land development loans, which will help builders to boost housing production.”
Group opposes planned rail merger
A coalition of companies involved in manufacturing, agriculture and energy production is opposing a planned $85 billion merger between regional railroad operators Union Pacific and Norfolk Southern, saying the arrangement could cause a deterioration in service and raise cargo shipping costs.
“Past rail mergers have shown what happens when consolidation goes unchecked: service suffers, costs increase, and jobs disappear,” the group known as the Rail Customer Coalition said this week in a letter to the Surface Transportation Board, one of the federal agencies reviewing the proposed merger.
The group said the deal could spark other similar mergers that would worsen a rail system already rife with delays and system breakdowns. Costs could rise and supply chains could be hindered with reduced competition, “leaving captive shippers with even fewer rail companies to choose from,” the group said.
In announcing the planned merger in July, Union Pacific and Norfolk Southern said a combination would help increase rail efficiency by creating the nation’s first transcontinental freight railroad, spanning 53,000 miles of track across 43 states.
Mortgage applications increase
Mortgage applications increased 29.7% for the week ended Sept. 12, compared with the prior week, the Mortgage Bankers Association reported Wednesday. The trade group said this week’s Fed decision to cut interest rates by 25 basis points could further encourage potential homebuyers to come off the sidelines.
The banker group’s Sept. 12 data showed the volume of refinancing applications rising 58% from the prior week and increasing 70% from a year earlier. Purchase applications gained 12% from the prior week and rose 20% from a year earlier.
“Indicative of the weakening job market, and in anticipation of a rate cut from the Federal Reserve, mortgage rates last week dropped to their lowest level since last October, with the 30-year fixed rate declining to 6.39 percent,” Mike Fratantoni, the banker group’s chief economist, said in a statement, noting homeowners “responded swiftly” with refinancings.
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