July 18 (Reuters) – U.S. home builder sentiment plummeted in July to its lowest level since the early months of the coronavirus pandemic, as high inflation and the steepest borrowing costs in more than a decade brought customer traffic to a near standstill.

At the same time, a gauge of activity in the services sector activity in the U.S. Northeast turned negative this month for the first time in a year, and firms there do not see an improvement over the next six months.

The National Association of Home Builders/Wells Fargo Housing Market Index fell for a seventh straight month to 55, the lowest level since May 2020, from 67 in June, NAHB said in a statement on Monday. Readings above 50 mean more builders view market conditions as favorable than poor.

July’s reading was below all 31 estimates in a Reuters poll of economists, which had a median expectation for a decline to 65. Moreover, the 12-point drop was the second-largest in the history of the series dating to 1985, exceeded only by the 42-point plunge in April 2020 when most of the country was under a COVID-19 lockdown.

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