A worker walks on the roof of a new home under construction in Carlsbad, California.
Mike Blake | Reuters
More builders are slashing home prices as confidence in the market continues to decline.
Homebuilder sentiment for September fell three points to 46 on the National Association of Home Builders/Wells Fargo Home Market Index. Anything less than 50 is considered negative.
This is the ninth consecutive month of declines and the lowest level since May 2014, other than a brief drop at the start of the 2020 coronavirus pandemic. about half of what it is today.
In fact, builders are blaming falling sentiment on rising interest rates. According to the Mortgage News Daily, the 30-year fixed average began this year around 3% before starting to climb steadily, surpassing 6% for a few days in June. It then fell slightly, dropping to nearly 5% in August before rising sharply again, and this month he is above 6%. This has made the already expensive housing market even more affordable. On the other hand, the Federal Reserve Expected to raise benchmark rates again Inflation remains high this week.
Home Builder and Developer NAHB Chairman Jerry Konter said: Originally from Savannah, Georgia.
Almost a quarter of homebuilders also reported lower home prices, up from 19% in August, Konter added.
Of the three components of the index, current sales fell 3 points to 54, sales forecasts over the next 6 months fell 1 point to 46, and buyer traffic fell 1 point to 31. .
Builders continue to report rising construction costs on top of rising interest rates weighing on the market. Rising land, labor and material costs have made it difficult for builders to bring down prices, but they are now being forced to do so.
“In this soft market, more than half of the builders surveyed reported using incentives such as mortgage rate buybacks, complimentary amenities and markdowns to boost sales,” said NAHB chief economist Robert Dietz. doing.
Sentiment in the Northeast fell 5 points to 51 and the Midwest also fell 5 points to 44 at the three-month moving average. The South fell 7 points to 56, while the West, where home prices are the highest, fell 10 points to 41.