According to the National Association of Home Builders, stubbornly high U.S. mortgage rates that have climbed to a 23-year high and have remained above 7% for the past two months continue to take a heavy toll on builder confidence, as sentiment levels have dropped to the lowest point since January 2023.
Builder confidence in the market for newly built single-family homes in October 2023 fell four points to 40 from a downwardly revised September 2023 reading, based on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the third consecutive monthly drop in builder confidence.
“Builders have reported lower levels of buyer traffic, as some buyers, particularly younger ones, are priced out of the market because of higher interest rates,” said NAHB Chairman Alicia Huey. “Higher rates are also increasing the cost and availability of builder development and construction loans, which harms supply and contributes to lower housing affordability.”
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