Currently Reading

Builder Confidence Drops as Interest Rates Climb Higher

Advertisement
Builders

Builder Confidence Drops as Interest Rates Climb Higher

Builders are feeling the pressure of rising mortgage rates coupled with surging prices for building materials 


May 18, 2022
Construction supervisor overlooking project
Image: Stock.adobe.com

As the housing market slows in the wake of rising interest rates, builder confidence is also steadily declining, Eye on Housing reports. Builder confidence in the single-family sector dropped for the fifth consecutive month in May, falling eight points to 69. 

Lower sentiment is a direct result of elevated prices for building materials as well as a drop in buyer demand in the throes of a widening affordability crisis. The NAHB/Wells Fargo HMI index measuring current sales conditions fell eight points to 78, and more losses are expected in the months to come. 

Housing is the business cycle, and the sector is particularly sensitive to changes for interest rates. And the housing market is facing growing challenges. Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family. Entry-level and first-time home buyers are especially bearing the brunt of this rapid rise in mortgage rates.

Read more

Related Stories

Builders

Homebuilders Keep a Steady Pace as the Market Cools

As mortgage rates quell heated competition and elevated buyer demand for existing homes, builders are finding ways to offer affordability to a more budget-conscious consumer base

New-Construction Projects

New Housing Starts Fell to a Two-Year Low in May

Housing supply is plummeting as builders become more cautious in a housing market ruled by rising mortgage rates

Housing Giants

2022 Housing Giants Report and Rankings

Pro Builder's Housing Giants report ranks the top U.S. home builders by revenue, closings, and type and location of homes built and takes a deeper dive into two driving forces in housing today: built-for-rent and off-site construction

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.