According to reports from the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), rising interest rates, building material bottlenecks, and elevated home prices continue to weaken the housing market. Builder sentiment fell for the 10th straight month in October and traffic of prospective buyers fell to its lowest level since 2012 (excluding the two-month period in the spring of 2020 at the beginning of the pandemic). Builder confidence in the market for newly built single-family homes dropped eight points in October to 38—half the level it was just six months ago. This is the lowest confidence reading since August 2012, with the exception of the onset of the pandemic in the spring of 2020, according to the NAHD/HMI reports.
“High mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” said NAHB chairman, Jerry Konter, a home builder and developer from Savannah, Georgia. “This situation is unhealthy and unsustainable. Policymakers must address this worsening housing affordability crisis.”