Buyer Traffic, Builder Sentiment, Fall to 'Unhealthy' Levels
NAHB says trends are “unsustainable” and policymakers “must address this worsening housing affordability crisis.”
Given that prospective buyer traffic fell to its lowest level since 2012, it’s no surprise that builder sentiment fell for the 10th consecutive month.
This is according to 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, according to the report.
Meanwhile, single-family housing starts declined further in September as rising affordability challenges continue to put a damper on new home production.
Overall housing starts decreased 8.1% to a seasonally adjusted annual rate of 1.44 million units in September, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
NAHB’s Builder Confidence Index has fallen to half of what it was six months ago.
NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga., said in prepared remarks, “High mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers.
“This situation is unhealthy and unsustainable. Policymakers must address this worsening housing affordability crisis.”
NAHB Chief Economist Robert Dietz said that 2022 will mark the first time since 2011 where single-family starts will decline.
On a regional and year-to-date basis, combined single-family and multifamily starts are 3.9% higher in the Northeast, 1.2% lower in the Midwest, 3.6% higher in the South and 3.4% lower in the West.