US housing starts fell nationwide in July, except in the South which saw a modest increase
Housing starts increased in the Midwest and West regions GETTY / JOE RAEDLE

The number of new residential constructions in the U.S. rose in October for the second month in a row, indicating some resilience in the housing market despite high mortgage rates.

Housing starts increased 1.9% on a monthly basis to 1.37 million units, after a gain of 3.1% in September, the Census Bureau said Friday. The number is still 4.2% lower than in October of 2022 and beat economists' estimate of 1.35 million in a Reuters survey.

There were monthly gains in the Midwest and in the West regions of the country. New constructions fell in the Northeast and in the South.

The report also showed that permits for new construction gained 1.1% from September and fell 4.4% from a year earlier.

The housing industry is feeling a direct impact of mortgage rates close to the highest level in almost 23 years, which have discouraged home purchases.

The average 30-year fixed rate fell to 7.44% in the week ended Nov. 16, the third consecutive drop, Freddie Mac said Thursday. Before this sequence of drops, the rates rose to nearly 8%, the highest since December 2000.

Despite the high rates, homebuilders are still increasing sales by adjusting their projects, prices and financing alternatives to meet buyers' needs.

D. R. Horton, the larggest homebuilder in the U.S., said on Nov. 7 that its annual sales will increase as much as 28% in the fiscal year that ends in September 2024.

On Oct. 24, PulteGroup, the third-largest in the industry, said that robust interest from Americans in home purchases led to increased profits and sales. The company emphasized that the strong fundamental desire for homeownership persists, while the housing supply remains limited.