Homebuilder sentiment rises in June, but builders sound alarm over high mortgage rates

foxbusiness.com:

ProChain President David Tawil explains why he predicts rate hikes are on the horizon and likely to stay high 'for a number of years.'

Confidence among builders in the U.S. housing market increased for the seventh straight month in June as limited inventory helped drive demand higher for new homes.

The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, rose one point to 56, the highest reading since June 2022.

Any reading above 50 is considered positive; prior to 2022, the gauge had not entered negative territory since 2012, excluding a brief – but steep – drop in May 2020.  

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Sentiment has been steadily rising as a worsening inventory shortage buoys consumer demand for new homes. 

A house is for sale in Arlington, Virginia, on July 13, 2023. ((Photo by SAUL LOEB/AFP via Getty Images) / Getty Images)

Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell with rates continuing to hover near a two-decade-high, leaving few options for eager would-be buyers other than new homes.

A recent report from Realtor.com showed that the number of available homes on the market in June was down more than 47% from the typical amount before the COVID-19 pandemic began in early 2020.

But builders say the industry continues to grapple with other problems, including high mortgage rates, elevated construction costs and limited lot availability, according to the report. 

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«The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out