May 28, 2023

number: The National Association of Home Builders (NAHB) monthly confidence index fell 3 points to 46 in September, the trade group said on Monday.

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This is the ninth consecutive month that the index has fallen, and excluding the pandemic, the September reading of 46 is the lowest since May 2014.

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A year ago this index was at 76.

Main details: All three gauges lowering the overall builder-confidence index fell.

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All the four NAHB zones registered a decline in builder’s confidence. The decline was led by the West, which saw a 10-point decline, followed by a 7-point decline in the South. The Northeast and Midwest each saw a 5-point drop.

big picture: New home builders are struggling to attract buyers due to high interest rates and home prices.

Mortgage rates rose above 6%, having more than doubled from last year, which has significantly cooled buyer demand.

Meanwhile, home prices continue to rise, with the median sale price for a new home at $439,400 in July, according to the U.S. Census Bureau.

Sellers are removing all stops to increase sales. NAHB said nearly a quarter of builders, up from 19% last month, are slashing prices to attract buyers.

Some are also offering free perks and mortgage rate purchases.

What the NAHB said: “Builder sentiment has declined every month in 2022, and the housing slowdown shows no signs of easing,” said Robert Dietz, chief economist at NAHB.

The decline comes as builders are dealing with higher construction costs and mortgage rates hit their highest level since 2008.

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Dietz said more than half of sellers NAHB used incentives to lure buyers.

What are they saying? One economist said builder confidence continues to fall, and other data to be released this week will paint a picture of a struggling sector.

Sal Gutierri, senior economist at BMO Capital Markets, wrote, “It’s no surprise that the most interest-sensitive segment of the economy is barely breaking through, especially after the steepest fall in prices over the past two years, the most in 33 years.” Pushing affordability to a bad level.” in a note.

Market Feedback: Yield on 10 Year Treasury Note TMUBMUSD10Y,
Monday morning rose above 3.48% on expectations of a sharper Fed meeting this week. While the SPDR S&P Homebuilders ETF XHB,
During the morning session, DR Horton Inc. Large home-builder stocks traded slightly lower than DHI.
Toll Brothers To Tol,
to Lenar Lane,
high edge.