According to the Zhitong Financial APP, the USA Department of Commerce reported on Wednesday that as the impact of the hurricane gradually weakened, the construction of single-family Residences in the USA rebounded in November. However, the threat of import Commodity tariffs and potential labor shortages due to large-scale immigration deportations may put pressure on new Residences next year.

Data shows that construction permits for single-family Residences increased only slightly in November, indicating that residential investment may have limited contributions to economic growth in the fourth quarter. Despite the Federal Reserve's continuous interest rate cuts, high mortgage rates remain a significant constraint on the Real Estate market. The tariff policies promised by Trump and the plans for the deportation of undocumented immigrants are believed to exacerbate this issue.

The construction starts for single-family Residences account for the vast majority of overall residential construction, increasing by 6.4% in November, with a seasonally adjusted annual rate reaching 1.011 million units. Most of this year's residential construction has faced challenges, primarily due to a severe shortage of supply in the secondary housing market. Although the Federal Reserve has lowered interest rates continuously since September, the yield on 10-year US Treasuries has risen due to economic resilience and concerns that new government policies may trigger inflation, while the 30-year fixed mortgage rate remains close to 7%.

JPMorgan economist Abiel Reinhart stated, "Our bond strategists expect the 10-year yield to decrease by only about 15 basis points by the end of next year, indicating limited room for mortgage rates to fall. At the same time, reduced immigration may suppress household growth and further impact the labor supply in the construction Industry."

The Federal Reserve announced on Wednesday a third consecutive interest rate cut, but is only expected to cut rates twice next year, rather than four times as predicted in September. This decision reflects the persistent resilience of the economy. However, some economists are concerned that certain policies of the Trump administration may push up inflation. Capital Economics North America economist Bradley Saunders stated, "We have a relatively pessimistic outlook, expecting Trump's trade and immigration policies to weaken the supply capacity of home builders."

Due to the impact of hurricanes Helen and Milton, construction of single-family Residences in the southern USA significantly slowed in October but rebounded by 18.3% in November. However, construction in the Northeast, Midwest, and Western regions continues to decline. Compared to the same period last year, construction of single-family Residences decreased by 10.2%.

The construction volume of multi-family Residences plummeted by 24.1%, dropping to an annualized rate of 0.264 million units, the lowest level since March. Overall Residential construction volume decreased by 1.8%, to an annualized rate of 1.289 million units, a year-on-year decline of 14.6%.

In November, the permits for single-family Residential buildings increased by 0.1%, reaching an annualized rate of 0.972 million units. Among them, permits in the southern region increased by 1.8%, while permits in the northeastern and western regions declined, and the midwest remained unchanged. Permits for multi-family Residences soared by 22.1%, reaching an annualized rate of 0.481 million units. Overall building permits increased by 6.1%, to an annualized rate of 1.505 million units, a slight decrease of 0.2% year-on-year.

Residential investment has dragged down GDP growth for two consecutive quarters. The Atlanta Federal Reserve predicts a 3.2% annualized growth in GDP for the fourth quarter, up from 2.8% in the third quarter.

In November, the number of single-family Residences waiting to be built increased by 0.7%, reaching an annualized rate of 0.144 million units. The completion rate in this category increased by 3.3%, reaching an annualized rate of 1.038 million units. Overall Residential completions decreased by 1.9%, to an annualized rate of 1.601 million units. The number of Residences under construction decreased by 1.8%, to an annualized rate of 1.434 million units, with the inventory of single-family Residences dropping by 0.8% to 0.637 million units, the lowest level since March 2021.

A survey by the National Association of Home Builders shows that due to expectations of reduced regulation under the Trump administration, the homebuilder confidence index remained at a seven-month high in December. However, economists warn that if Trump implements his trade and immigration policies, lumber prices may rise further, and labor shortages in the construction Industry will worsen.

The USA imports a large amount of lumber from Canada, which is a key raw material for Residential construction. Trump has indicated he would impose a 25% tariff on all goods imported from Canada and Mexico. This year, the Biden administration has raised the import tariff on Canadian softwood products from 8.05% to 14.54%.

"Much of the regulation of Residential construction comes from state and local governments," said Nancy Vanden Houten, chief US economist at Oxford Economics. "Non-citizen foreign laborers account for about 18% of the workforce in the construction Industry." In the future, whether the USA's Residential construction can overcome the current difficulties will largely depend on the comprehensive impact of policy changes on market supply and demand.