According to a year-end look by The JIAN Group, a building material supplier advisory group, at the start of 2024, the industry faced conditions that could lead to either prosperity or disaster: a presidential election cycle, interest rate cut speculation and volatile commodity prices. 

At year-end, the firm reassessed its prognostications (with the benefit of hindsight) and offered context for the new year.

Housing Permits / Starts

In 2024, 971K single-family (SF) permits were issued, and 970K SF homes were started. Performance was flat year over year. Compared to 2022 levels, SF permits fell 0.3%, and SF starts fell 4%.     

Interest Rates

In January 2024, the average 30-year fixed mortgage rate was 6.62%. Following cuts by the Federal Reserve, the lowest rate dropped to 6.08% in September. In December, the average rate rose to 6.72%. Notably, the last time the 30-year fixed rate was 6.72% was July 2007.

Commodity Prices

Lumber and steel prices both declined in 2024. The Random Lengths Framing Lumber Composite reached its lowest point in July 2024 at $360 per MBF. Meanwhile, steel rebar prices fell below $400 per metric ton, marking the lowest price since 2016.

Housing Verdict

After a captivating election night, the economy remains resilient and steadfast, continuing to thrive. Housing remains undersupplied, with the research and consultancy group JBREC estimating the U.S. is 1.3 million units short. 

Mortgage rates are challenging home buyers' patience, and for many, the decline in interest rates isn't happening quickly enough. Additionally, commodity prices are at their lowest levels in years. Despite the short-term struggles with mortgage rates, housing costs, and home buyer savings, the market continues to show promising long-term growth.