U.S. homebuilder confidence fell in April due to rapidly rising interest rates combined with the ongoing home price increases and construction costs, according to NAHB.
The NAHB Housing Market index declined to a reading of 77 this month from 79 in March.
This is the fourth consecutive month that builder sentiment has declined.
Mortgage interest rates have increased more than 1.9% since the start of the year and currently stand at 5%, the highest level in more than a decade.
The HMI index gauging current sales conditions fell from 87 to 85, the index measuring traffic of perspective buyers dropped from 66 to 60, and the index for sales expectations in the next 6 months increased from 70 to 73 after falling 10 points in March.
“The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices and escalating material costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market,” said NAHB Chief Economist Robert Dietz.
The Right Facts will continue to monitor the housing market.