There have been warnings throughout this year of a slowing home construction market, and this month’s statistics can provide supporting evidence to what many analysts have predicted.

New home construction fell by 5.3 percent across the nation in September, with increased mortgage rates and the impact of Hurricane Florence taking toll.

Fall in New Home Construction is Part of a Concerning Trend

New home construction is still up for the year when compared to previous data. However, a slow in growth is concerning, as it indicates that the market will begin to shrink. The reduced pace of new homebuilding has been attributed to both mortgage rate increases and the impact of Hurricane Florence in North Carolina.

October could be another poor month with a drop in new home construction, as Hurricane Michael is likely to slow construction in Florida.

Mortgage Rate Impact is Significant

The Federal Reserve has increased interest rates three times this year, and hikes are expected up until 2020. As the economy is booming, the cost of lending is increasing. Fixed rates for 30-year mortgages increased to 4.9% this month. Home buyers have not seen rates this high since 2011.

Home prices are also increasing, so there’s a double cost jump for buyers.

Developers are Exploring Options to Make Homes More Affordable

Developers, builders, and buyers are all aware of the problems of a more expensive home market. There is an emerging trend with multi-family buildings becoming more common. Apartments, town homes, and duplex developments are alternatives that can be more affordable for both developers and buyers.

Is Now the Right Time to Buy a Home?

Whether you are investing or buying a home to live in, homes are becoming more expensive. A growing economy means that interest rates are only going to become higher over the next two years.

Waiting for a downturn is a dangerous prospect. Growth slowed in the last month but that won’t necessarily change demand. In fact, prices are more likely to rise along with interest rates.

Ten years ago, the 30-year fixed mortgage rate was above 6%. The longer you wait, the more risk there is that we will approach this figure again. Today’s market conditions are still reasonable and playing the waiting game is only likely to raise the cost of home ownership overall.