The National Association of Home Builders’ US housing market index for August 2022 came in at just 49, compared to…
(Boursier.com) — The National Association of Home Builders’ (NAHB) U.S. housing market index for August 2022 came in at just 49, down from a FactSet consensus of 54 and a level of 55 a month earlier. . This is the first time since May 2020 that this index of builder confidence has fallen below the equilibrium level of 50. A year ago, the index was 75. In January this year, it was even 83 All three gauges that underpin the overall builder confidence index have fallen.
The measure of current selling conditions fell 7 points, while the component that tracks traffic from potential buyers fell 5 points. The measure of sales forecasts for the next six months fell 2 points. In August, homebuilders reported a drop in traffic from potential buyers to 32 points, the lowest level since April 2014 outside of the pandemic. All regions showed a decline in builder confidence. The declines were led by the West, which saw an 11-point drop, followed by the Northeast, with a 9-point drop, the South, with a 7-point drop, and the Midwest, with a 7-point drop. 3 points.
Mortgage rates and interest rates are much higher today than a year ago, slowing demand and pushing builders to offer more incentives. One in five homebuilders told NAHB they cut prices in the past month to boost sales or limit cancellations. The median price reduction reported was 5%.
“The Federal Reserve’s monetary policy tightening and persistently high construction costs have caused a housing slump,” NAHB chief economist Robert Dietz said in a statement. Dietz expects total single-detached home starts to decline in 2022, “the first such decline since 2011.”