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News Sept. 20, 2023

Homebuilder sentiment was negative for the first time in seven months in September

Builder sentiment decreased five points to 45 in September, going negative for the first time in seven months; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to CNBC. It reached a record high of 90 in November 2020.

All three components of the homebuilder index declined, with current sales conditions dropping six points to 51; sales expectations in the next six months decreasing six points to 49; and buyer traffic falling five points to 30.

“High mortgage rates are clearly taking a toll on builder confidence and consumer demand, as a growing number of buyers are electing to defer a home purchase until long-term rates move lower,” said Robert Dietz, NAHB’s chief economist.

The average rate on the 30-year fixed loan has been higher than 7% since June.

Thirty-two percent of builders reported cutting prices in September, which is up from 25% in August.

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