Single-family housing starts fell 5.6% from December’s revised estimate to 1,116,000, while multifamily starts slid 2.1% to 510,000, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development said.

The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 3.93% from 3.86%, the Mortgage Bankers Association said. 

Home-price growth is expected to average about 5% this year, far below the record-breaking pace set in 2021, RCLCO reported. 

Nationally, pending home sales fell as interest rates rose last month.

Builders started to make headway against supply-chain issues that have hampered construction of homes in the face of high demand. 

“December saw sales retreat, but the pull back was more a sign of supply constraints than an indication of a weakened demand for housing.” — NAR chief economist Lawrence Yun

While multifamily starts surged 13.7% compared to November, the pace of new single-family housing construction slid 2.3%, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

“While lean existing home inventory and solid buyer demand are supporting the need for new construction, the combination of ongoing increases for building materials, worsening skilled labor shortages and higher mortgage rates point to declines for housing affordability in 2022.” — NAHB Chairman Chuck Fowke

The cost of living has risen across the nation, but some U.S. metros have experienced particularly significant increases.

“MBA expects solid growth in purchase activity this year, as demographic drivers and the strong economy support housing demand,. However, the strength in growth will be dependent on housing inventory growing more rapidly to meet demand.” — Mortgage Bankers Association associate vice president of economic and industry forecasting Joel Kan

At the same time, the average 30-year fixed-rate mortgage rose to 3.33%, its highest level since April 2021, the Mortgage Bankers Association said.

Nationally, interest rates rose as builder confidence fell.

Nationally, housing prices were also on the rise, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. 

“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” National Association of REALTORS® chief economist Lawrence Yun said.

The median sales price of new homes hit a new high of $416,900.

The median existing-home sales price for all housing types rose again on an annual basis, marking 117 consecutive months of gains.