Key Points
- U.S. builder confidence fell again in October as the combination of rising interest rates, building material bottlenecks, and elevated home prices continue to weaken the housing market.
- The NAHB Housing Market index declined to a reading of 38 this month from 46 in September.
- This is the tenth consecutive month that builder sentiment has declined and the lowest reading since 2012 with the exception of the spring of 2020.
- The HMI index gauging current sales conditions fell from 54 to 45, the index measuring traffic of perspective buyers dropped 6 point to 25, and the index for sales expectations in the next 6 months dropped 11 points from 46 to 35.
- “High mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers. This will be the first year since 2011 to see a decline for single-family starts,” said NAHB Chief Economist Robert Dietz.
- The Right Facts will continue to monitor the housing market.