The current context of the American construction market
The American construction market showed signs of weakness in September 2024, with a 0.5% drop in new construction sites started and a 2.9% decrease in building permits. These data, published by the Department of Commerce, surprised analysts, who expected a less marked contraction. The current situation is the result of several economic and social factors that are affecting the sector
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The causes of the contraction
One of the main causes of the shrinking housing market is rising interest rates, which have made mortgages more expensive for potential buyers. This has led to a decrease in demand for new housing. In addition, global economic uncertainty and concerns about inflation have helped to curb investment in the sector. Many builders are reviewing their plans, delaying the start of new projects until there is greater economic stability
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The consequences for the construction sector
The contraction of the housing market has significant repercussions not only for builders, but also for the entire economy. A drop in building permits and new construction sites started may lead to a decrease in employment in the sector, with consequent ripple effects on suppliers and subcontractors. In addition, a reduction in construction activity may negatively affect the housing market, leading to a stagnation in housing prices. Experts warn that, if the situation doesn’t improve, we could see a larger economic slowdown
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