Marking the seventh straight month of gains and the highest level since June 2022, builder sentiment in the market for single-family homes rose 1 point in July to 56, according to the National Association of Home Builders/Wells Fargo Housing Market Index as reported by CNBC. (A reading above 50 is considered positive sentiment.)
Driving that demand for new construction is low supply in the resale market, with higher mortgage rates and housing supply challenges continuing to put pressure on the market.
“Although builders continue to remain cautiously optimistic about market conditions, the quarter-point rise in mortgage rates over the past month is a stark reminder of the stop and start process the market will experience as the Federal Reserve nears the end of the ongoing tightening cycle,” said Robert Dietz, NAHB’s chief economist.
The average rate on the popular 30-year fixed mortgage crossed over 7% briefly in May and then again at the end of June. It has only come down slightly in the last week. Those higher rates are straining affordability in the market, where prices for existing homes are rising yet again.
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