Homebuilder sentiment unexpectedly plummets to lowest level this year
Redfin CEO Glenn Kelman analyzes the state of the housing market after mortgage rates surged past 7% on 'Cavuto: Coast to Coast.'
Confidence among builders in the U.S. housing market plunged for the fourth straight month in November as high mortgage rates continued to weigh on consumer demand for new homes.
The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, fell six points to 40, the lowest reading since January. The decline followed a five-point drop in October.
Any reading below 50 is considered negative.
«The rise in interest rates since the end of August has dampened builder views of market conditions, as a large number of prospective buyers were priced out of the market,» said Alicia Huey, NAHB chair and a custom home builder and developer from Birmingham, Alabama.
HOME FORECLOSURES ARE ON THE UPSWING NATIONWIDE
Homes under construction in Sacramento, California, on July 3, 2023. (David Paul Morris/Bloomberg via / Getty Images)
Sentiment among builders had been steadily rising earlier this year as limited resale inventory pushed would-be buyers to seek out new construction instead. But when mortgage rates shot above 7% in September, it throttled demand among would-be homebuyers.
Rates are expected to remain elevated, as the Federal Reserve has hinted that it may hold interest rates at peak levels for longer than previously anticipated.
But borrowing costs have retreated slightly in November as many investors believe the Fed is done with its aggressive interest-rate hike campaign.
MORTGAGE CALCULATOR: SEE HOW MUCH HIGHER RATES COULD COST YOU
Rates on the popular 30-year fixed mortgage are currently hovering around 7.5%,
Read more on foxbusiness.com
