Key Takeaways:

• New home construction showed little change in October compared to the previous month.
• Builder confidence surged in November, particularly regarding future market conditions, which saw the largest increase.

The pace of new housing activity remained mixed in October, influenced by the aftermath of Hurricane Milton, which impacted building starts. Meanwhile, permits for future homes remained nearly unchanged compared to September.

Permits were issued at an annual rate of 1.416 million, representing a slight decrease of 0.6% from September’s revised rate of 1.425 million. At the same time, housing starts dropped by 3.1% to 1.311 million.

Despite these figures, the housing industry has grown more optimistic. The National Association of Homebuilders/Wells Fargo Index rose by three points in November, reflecting increased confidence in both current conditions and future prospects. The index measuring current sales conditions rose by two points to 49, while future sales expectations jumped by seven points to 64. Additionally, prospective buyer traffic gained three points, reaching 32.

Builders have adjusted to market conditions by offering smaller homes, financing incentives, and a variety of options that appeal to both first-time and repeat buyers.

While mortgage rates briefly fell in late summer, they have since risen alongside other interest rates, even after the Federal Reserve lowered rates in September. Concerns over President-elect Donald Trump's economic policies, particularly the potential for inflation, have led to higher yields on the 10-year Treasury, which often influences borrowing costs.

“The political landscape of 2025 adds to builder uncertainty even further,” noted Realtor.com Senior Economist Joel Berner. “On one hand, the threat of mass deportations could lead to labor shortages and higher labor costs for builders, and tariffs on building materials will chip away at their profits. On the other hand, some campaign promises from the now-elected Trump administration to support building new homes (such as opening up federal lands for development and removing building regulations) may have given builders a jolt of confidence.”

Another challenge facing builders could be the shrinking availability of remote work. A new report from Indeed revealed a significant drop in remote and hybrid job postings as companies like Amazon push employees to return to the office. During the COVID-19 pandemic, remote work drove many people to relocate from major cities to the Sunbelt, contributing to a boom in house sales and price increases.

Indeed’s survey found that remote job postings fell to 7.8% of all openings in October, down from 10.4% in February 2022. “The share of remote jobs has fallen or remained unchanged in 59% of all sectors analyzed – signaling that the remote work boom may be over,” Indeed said.