{"id":11929,"date":"2023-08-15T15:05:25","date_gmt":"2023-08-15T15:05:25","guid":{"rendered":"https:\/\/isafespend.com\/news\/homebuilder-sentiment-drops-sharply-as-mortgage-rates-surge-over-7\/"},"modified":"2023-08-15T15:05:27","modified_gmt":"2023-08-15T15:05:27","slug":"homebuilder-sentiment-drops-sharply-as-mortgage-rates-surge-over-7","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=11929","title":{"rendered":"Homebuilder sentiment drops sharply, as mortgage rates surge over 7%"},"content":{"rendered":"
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Rising mortgage rates are hitting potential homebuyers hard, and that is taking steam out of the homebuilding market.<\/p>\n

Builder sentiment in the market for newly built homes dropped six points to 50 in August, according to the National Association of Home Builders\/Wells Fargo Housing Market Index. That is the first decline in seven months and the lowest level since May, when sentiment first rose out of negative territory. Anything over 50 is considered positive.<\/p>\n

“Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August,” said Alicia Huey, NAHB chair and a homebuilder and developer from Birmingham, Alabama.<\/p>\n

Mortgage rates are now holding solidly over 7%, hitting 7.24% Monday, according to Mortgage News Daily. The average rate on the 30-year fixed loan rose over 7% in the last week of July.<\/p>\n

Of the index’s three components, current sales conditions fell five points to 57, and sales expectations in the next six months fell four points to 55. Buyer traffic dropped six points to 34.<\/p>\n

“Declining customer traffic is a reminder of the larger challenge that shelter inflation is up 7.7% from a year ago and accounted for a striking 90% of the July Consumer Price Index reading of 3.2%,” said Robert Dietz, NAHB’s chief economist, who added that the market currently has a shortfall nationwide of about 1.5 million housing units.<\/p>\n

Higher mortgage rates and the decline in buyer activity has more builders using sales incentives once again. They had done that in the second half of last year, when interest rates first moved higher. They then pulled back this spring, when demand surged.<\/p>\n

Now, after dropping for four straight months, the share of builders cutting prices rose to 25% in August from 22% in July. The average price cut, however, remained at 6%. The share of builders using all types of incentives, including buying down interest rates, rose to 55% in August from 52% in July. But it was still lower than the 62% share at the end of last year.<\/p>\n

Regionally, on a three-month moving average, builder sentiment in the Northeast rose four points to 56. In the Midwest and South, sentiment was unchanged at 45 and 58, respectively. In the West, where housing is most expensive, sentiment fell one point to 50.<\/p>\n<\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Rising mortgage rates are hitting potential homebuyers hard, and that is taking steam out of the homebuilding market. Builder sentiment in the market for newly built homes dropped six points to 50 in August, according to the National Association of Home Builders\/Wells Fargo Housing Market Index. That is the first decline in seven months and<\/p>\n","protected":false},"author":1,"featured_media":11930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43],"tags":[],"class_list":{"0":"post-11929","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"\nHomebuilder sentiment drops sharply, as mortgage rates surge over 7% | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Rising mortgage rates are hitting potential homebuyers hard, and that is taking steam out of the homebuilding market.Builder sentiment in the market for\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isafespend.com\/?p=11929\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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