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.