High Mortgage Rates Continue to Weaken Builder Confidence

By Robert Dietz
NAHB – Eye on Housing
September 18, 2023
Category: Finance & Economics
Region: United States

Persistently high mortgage rates above 7% continue to erode builder confidence, as sentiment levels have dropped below the key break-even measure of 50 for the first time in five months. Builder confidence in the market for newly built single-family homes in September fell five points to 45, according to the NAHB/Wells Fargo Housing Market Index (HMI). This follows a six-point drop in August. The two-month decline in builder sentiment coincides with when mortgage rates jumped above 7% and significantly eroded buyer purchasing power. …All three major HMI indices posted declines in September. The HMI index gauging current sales conditions fell six points to 51, the component charting sales expectations in the next six months also declined six points to 49 and the gauge measuring traffic of prospective buyers dropped five points to 30.

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