{"id":2037877,"date":"2023-09-19T18:54:02","date_gmt":"2023-09-19T22:54:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-homebuilder-sentiment-tanks-again-amid-spike-in-mortgage-rates-erasing-months-of-gains\/"},"modified":"2023-09-19T18:59:21","modified_gmt":"2023-09-19T22:59:21","slug":"us-homebuilder-sentiment-tanks-again-amid-spike-in-mortgage-rates-erasing-months-of-gains","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-homebuilder-sentiment-tanks-again-amid-spike-in-mortgage-rates-erasing-months-of-gains\/","title":{"rendered":"US homebuilder sentiment plummets due to surge in mortgage rates, wiping out recent progress."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fus-homebuilder-sentiment-tanks-again-amid-spike-in-mortgage-rates-erasing-months-of-gains%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2037877&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>Homebuilder confidence in the \u2062American\u200d housing\u2062 market took a\u200c nosedive in\u2064 September, leaving analysts stunned.<\/p>\n<p>This decline \u2063comes \u2062as \u200bmortgage rates soar, dampening the demand for new homes.<\/p>\n<p>The National Association of Home Builders\/Wells Fargo Housing Market Index, which tracks the health of the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/homebuilder-sentiments-takes-a-historic-plunge\/\" title=\"Homebuilder Sentiments Takes a Historic Plunge\">single-family housing market<\/a>, \u2064saw builder confidence plummet from 50 \u2062to \u206345 points, marking the lowest reading since April.<\/p>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n<a href=\"http:\/\/www.theepochtimes.com\/real-estate\/mortgage-demand-crashes-americas-3rd-biggest-homebuilder-posts-41-percent-drop-in-new-home-orders-5027342?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>Mortgage Demand Crashes, \u2063America&#8217;s \u20633rd Biggest\u2064 Homebuilder Posts 41 \u2062Percent Drop in New Home Orders<\/h3>\n<p><\/a>\n<\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">2\/1\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[120px]\">\n<a href=\"http:\/\/www.theepochtimes.com\/real-estate\/mortgage-demand-crashes-americas-3rd-biggest-homebuilder-posts-41-percent-drop-in-new-home-orders-5027342?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n<\/div>\n<\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n<a href=\"http:\/\/www.theepochtimes.com\/real-estate\/mortgage-application-volume-tumbles-to-lowest-levels-in-nearly-30-years-as-home-costs-soar-5492521?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>Mortgage Application Volume Tumbles to Lowest Levels in Nearly 30 Years as \u2062Home Costs Soar<\/h3>\n<p><\/a>\n<\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">9\/17\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[120px]\">\n<a href=\"http:\/\/www.theepochtimes.com\/real-estate\/mortgage-application-volume-tumbles-to-lowest-levels-in-nearly-30-years-as-home-costs-soar-5492521?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>Any reading below 50 is considered negative.<\/p>\n<div class=\"my-5\">\n<p>The decline\u200b in builder confidence followed a six-point drop \u2062in August, \u2062erasing five months of gains.<\/p>\n<h2>Homebuilder Sentiment \u200cTumbles Again<\/h2>\n<p>Builder sentiment had been on the rise throughout most of 2023, as the limited \u200csupply of \u200bexisting homes pushed potential buyers towards new\u200d construction.<\/p><\/div>\n<p>However, the surge in mortgage rates above\u200b 7\u2062 percent this month\u2064 weakened the demand among prospective homebuyers.<\/p>\n<p>&#8220;High mortgage rates are clearly taking a toll on builder confidence and consumer demand, as a growing number of buyers are choosing to delay\u200c their home purchases \u2063until long-term rates decrease,&#8221; explained Robert Dietz,\u2062 chief \u2063economist \u2063at NAHB.<\/p>\n<p>\u201cImplementing policies that allow builders to increase the housing supply is the best \u2064solution to alleviate the nation&#8217;s housing affordability \u200ccrisis and curb rising shelter \u2064costs. Shelter inflation rose by 7.3 percent year-over-year in August, compared to an overall consumer\u200b inflation rate of 3.7 percent.\u201d<\/p>\n<p>Meanwhile, the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-homebuilder-sentiment-tanks-again-amid-spike-in-mortgage-rates-erasing-months-of-gains\/\" title=\"US homebuilder sentiment plummets due to surge in mortgage rates, wiping out recent progress.\">gauge measuring prospective buyer traffic dropped<\/a>\u2063 by five points \u2062to 30.<\/p>\n<p>Mortgage\u200d rates are expected to remain high, \u2062as Federal Reserve officials have indicated that they may keep \u2063interest rates elevated for longer than anticipated, at\u200d 5.25\u20135.5 percent.<\/p>\n<p>Currently, rates for the popular\u200b 30-year fixed mortgage hover around 7.18 percent, according to Freddie Mac. This is significantly higher than the 6.02 percent rate recorded a year ago and the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/gas-group-pushes-back-on-biden-blaming-industry-for-high-fuel-prices-distraction-from-bad-energy-policies\/\" title=\"Gas Group Pushes Back on Biden Blaming Industry for High Fuel Prices: 'Distraction\u2019 from Bad Energy Policies\">pre-pandemic average<\/a> of 3.9 percent,\u2062 reaching levels not \u200bseen in two decades.<\/p>\n<p>&#8220;The \u200cdecline in builder sentiment \u200dover the past two months coincides with the \u2062rise in mortgage rates above 7 percent, significantly reducing the purchasing\u200b power of \u200cbuyers,&#8221; said NAHB Chair \u200cAlicia Huey, a custom homebuilder and developer\u2063 from Birmingham, Alabama.<\/p>\n<p>&#8220;Furthermore, \u2064builders continue to \u200cface shortages of construction workers, buildable lots, and\u2063 distribution \u200dtransformers, exacerbating the challenges in housing affordability.&#8221;<\/p>\n<p>Recently \u2064published data from the Census Department on September 19 revealed that housing starts in August dropped \u2063by 11.3 percent compared to\u200b July, with multifamily housing construction experiencing a disproportionate decline.<\/p>\n<p>Even\u200c the\u200d new starts of single-family homes during that \u2063period fell by \u200b4.3 percent.<\/p>\n<div class=\"my-5\">\n<p>Work on new\u2064 single-family homes\u200d in August reached only 16 \u200dpercent, equivalent to an annual rate of 941,000, well \u2063below the average \u2062construction pace from mid-2020 to mid-2022.<\/p>\n<h2>7 Percent Mortgage Rates\u200d Suppressing the\u200b Market<\/h2>\n<p>Higher\u200c mortgage rates have \u2062led many home construction \u2063firms to offer incentives to attract\u200b buyers.<\/p><\/div>\n<p>In \u2063September, at\u2064 least 59 percent of builders reported using incentives such as buying down interest rates \u2064and offering discounts.<\/p>\n<p>Thirty-two percent of builders stated that they had reduced home prices, compared to 25 percent in August. This marks \u200dthe highest share of firms cutting prices since December of last \u2062year, at \u200c35 percent.<\/p>\n<p>The average builder price discount \u200dremains at\u200d 6 percent.<\/p>\n<p>The September HMI\u2062 survey\u2063 found that 42 percent of new single-family home buyers were first-time buyers, significantly higher than the pre-pandemic market levels in 2018,\u200c which stood\u200b at 27 percent.<\/p>\n<p>The survey also revealed that \u200dthe current\u2062 sales conditions \u200cindex dropped by six points to 51, while sales expectations for the next six months \u2064among respondents declined by six points to \u200c49.<\/p>\n<p>&#8220;Homebuilders are facing \u200ca challenging\u2064 environment due to shortages of building materials and construction workers. High mortgage rates are dampening the demand for new homes,&#8221; commented Colin O&#8217;Leary, a licensed real\u200d estate salesperson with\u2063 Berkshire Hathaway HomeServices\u200d Fillmore Real Estate in New York City.<\/p>\n<p>&#8220;The cost of \u2062homeownership has never been higher. Consequently, an increasing number of \u2064potential first-time homebuyers are putting their dreams of homeownership \u200bon hold,&#8221; \u2062added Mr. \u200bLeary.<\/p>\n<\/div>\n<\/blockquote>\n<p> <\/p>\n<h2> How did the increase\u200c in mortgage rates impact the \u200ddemand for\u200d new homes in August?<\/h2>\n<p><span>  D that housing starts fell by 3.9 percent in\u2062 August, further highlighting the impact of \u200c<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-applications-fall-to-lowest-level-since-december-2019\/\" title=\"Mortgage Applications Fall to Lowest Level Since December 2019\">rising mortgage rates<\/a> on the housing market.<\/p>\n<p>The decline in homebuilder confidence is \u2062a concerning sign for the housing market, as builders \u2062are the\u200c key players\u200c in\u2064 driving new construction and meeting the demand for\u200d housing.\u2063 When builder confidence is low, it indicates a \u200dlack of optimism about \u200cfuture sales and growth in the industry.<\/p>\n<p>The increase \u200cin mortgage \u2062rates has played a significant role in dampening the demand for new\u2064 homes. Higher interest rates mean <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/house-gop-rejects-socialist-mortgage-rule-but-that-wont-stop-biden-from-taking-your-money-for-equity\/\" title=\"GOP Rejects Socialist Mortgage Rule, Biden Still Pursues 'Equity' Taxation\">higher monthly mortgage payments<\/a> for buyers, making homeownership less affordable. \u200dThis has led many potential buyers to delay their home purchases \u200cin the hope that rates will \u200cdecrease in\u200c the future.<\/p>\n<p>Robert Dietz, \u2063the chief economist at the \u2062National Association of Home Builders \u200c(NAHB), emphasized the need for policies \u2063that promote an \u200dincrease \u200din housing \u2063supply. The limited supply of \u200cexisting homes has been a driving factor in\u200d the rise \u200bof new construction, but a sustainable\u2064 solution \u200cto the housing affordability \u200ccrisis requires a more significant \u200cincrease in the housing supply.<\/p>\n<p>In addition\u2062 to the\u200d impact of higher\u2064 mortgage \u200drates, builders also face challenges \u2062such as shortages of\u2063 construction \u2064workers, buildable lots, and distribution transformers. These \u200dfactors contribute to the overall challenges\u2062 in housing affordability and hinder \u2062the ability of\u200b builders to meet the growing demand for \u200dhomes.<\/p>\n<p>Looking ahead, the housing market is likely to continue facing challenges as mortgage rates are expected to\u2064 remain high. The Federal Reserve has indicated that interest rates\u2063 may remain\u200d elevated for longer than anticipated, which will further impact the purchasing power of buyers. It is crucial for policymakers to address these issues\u200b and implement strategies that support the \u200bhousing market and alleviate the affordability crisis.<\/p>\n<p>Overall, the sharp decline in homebuilder \u2063confidence reflects the challenges facing the American housing market. The combination of high mortgage rates and supply limitations has dampened demand \u2062and \u200dhindered the growth of the industry. It is essential for stakeholders to work together to find \u200csolutions that promote housing affordability and support sustainable\u200d growth in \u200bthe housing market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Homebuilder confidence in the US housing market dropped for the second consecutive month in September, surprising analysts. The decline is attributed to the increase in mortgage rates, negatively impacting demand for new homes. The National Association of Home Builders\/Wells Fargo Housing Market Index, which assesses the single-family housing market, witnessed a decline.<\/p>\n","protected":false},"author":327,"featured_media":2037878,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2037877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2037877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/327"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2037877"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2037877\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2037878"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2037877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2037877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2037877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}