The dip in overall construction starts is largely another casualty of the high interest rates imposed by the Federal Reserve, and Dodge Chief Economist Richard Branch said groundbreakings are likely to continue easing until interest rates fall. In an effort to curb inflation, the Fed has been steadily increasing interest rates, impacting cap rates, borrowing rates and the cost of construction. Rates were raised 11 times between March 2022 and July 2023. The Fed last week decided to keep rates the same for now but hinted at the possibility of three rate cuts in 2024.
Source: Construction Starts Plummet 15% In November, A 10-Month Low
