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.