Residential construction is facing challenges but managing to stay afloat. The surge in interest rates leading to increased mortgage costs has resulted in a notable drop in house prices, particularly in Germany (nearly -10% in Q2 2023), and a slowdown in the majority of European countries as well as the United States. Residential building permits have experienced a modest decline across many countries for over a year. In Europe, credit surveys indicate a construction output decline reminiscent of the 2008 situation, yet survey data has already reached its lowest point, and renovation activities continue to provide support. In the U.S., the construction of new homes remains robust, attributed to a scarcity of existing homes in the market. Looking ahead, the sector is anticipated to receive a boost from the second quarter of 2024 as interest rates decrease and the overall macroeconomic environment improves.

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