Builders also broke ground on 553,000 "multi-family units," including apartment buildings and condos. That broke a record that hasn’t been surpassed since the 1980s, according to data collected by accounting firm Grant Thornton.
The housing market is on an upswing after the Federal Reserve cut interest rates three consecutive times last year.
Low mortgage rates have set off a stampede of borrowing.
Mortgage applications to purchase homes were up more than 30% in the last month, while refinance applications soared — up 109% from last year.
Home construction surges outside major U.S. cities
Major U.S. cities, like Raleigh, Nashville, Charlotte, Denver and Austin have seen a wave of inbound moves over the last year due to lower housing costs and increased job opportunities.
"There are not enough existing homes in these hot job markets to fill the demand, so builders have had to ramp up production, especially through the second half of 2019,” says Yelena Maleyev, associate economist for Grant Thornton.
The unprecedented growth in housing starts is in response to the increased demand for housing, and homebuilder confidence is regaining momentum for the first time in two decades.
But there are potential drawbacks. The strong demand for construction is expected to continue into 2020 but issues arise with finding enough workers to build these units quickly. The tight labor market and tight immigration policies may impose barriers on construction efficiency.
Mortgage rates stay down this week
Current average mortgage rates
|Loan Type||Interest Rate|
|30-year fixed-rate mortgage||3.26%|
|15-year fixed-rate mortgage||2.73%|
|5/1 adjustable-rate mortgage||3.17%|
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Mortgage rates are little changed from last week's lowest levels in three months, mortgage giant Freddie Mac reported Thursday.
The average for a 30-year fixed-rate mortgage is now 3.65%, up a smidge from last week's 3.64%. The loans in the firm's survey come with an average 0.7 point.
One year ago, the benchmark mortgage rate was more than three-quarters of a percentage point higher, at an average 4.45%.
Thirty-year mortgage rates are the lowest for mid-January in seven years, MoneyWise.com has found, by reviewing Freddie Mac's historical data.
Rates fell sharply last week as the U.S. drama with Iran had investors pouring their money into safe-haven investments, including U.S. Treasury bonds. Bond prices went up, their yields (interest rates) went down, and so did mortgage rates.
The yields haven't recovered much, despite the announcement of a new U.S. trade deal with China. For now, many of the tariffs are still in place, which isn't very comforting for investors.
Use the calculator below to see the kind of monthly payment you can expect from today's low rates:
Other mortgage rates this week
Rates on 15-year fixed-rate mortgages have inched up to an average 3.09%, from 3.07% last week. Those loans are a popular choice among homeowners who refinance.
A year ago, 15-year mortgages were averaging 3.88%, Freddie Mac says.
This week, rates have jumped on 5/1 adjustable-rate mortgages, or ARMs, which are level for five years and then can adjust up — or down — each year.
ARMs are currently being offered at an average initial rate of 3.39%, up from last week's 3.30%. Last year at this time, the starter rates on ARMs were averaging 3.87%.