According to data released by the government on Friday, the housing starts rate for new homes rose by 1.9% in October, reaching 1.37 million units. This growth is mainly attributed to builders increasing the construction intensity of new projects, as they believe the market urgently needs more housing units, thus accelerating the construction pace.

Despite the ongoing shortage of existing housing inventory, new construction homes continue to be favored by homebuyers, especially as the resale market continues to face shortages.

In terms of specific data, both single-family and multi-family housing construction increased in October. Notably, home builders in the Midwest and West increased the construction intensity of single-family homes, rising by 12% each.

In contrast, housing starts in the Northeast saw a decline of 14.5%. This indicates significant differences in real estate market development in different regions and reflects variations in regional supply and demand relationships.

As an indicator of future construction, building permits in October increased by 1.1%, reaching 1.49 million. Additionally, as of September, approximately 1.67 million housing units were under construction.

Looking ahead, despite mortgage rates approaching 8%, confidence among home builders slightly declined in November. However, with the U.S. economy slowing down, interest rates seem to be decreasing, and therefore, confidence among home builders is likely to return to a positive trajectory.

From analysts' perspectives, they point out that despite a slight reduction in housing demand over the past one to eighteen months due to rising mortgage rates and home prices, builders generally have a longer-term perspective. They are keenly aware of the structural shortage in U.S. housing.

Therefore, despite rising financing costs, builders may wish to maintain a certain output rate regardless of recent soft demand.