Builder confidence in the single-family home market has declined to its lowest level since January, with the National Association of Home Builders/Wells Fargo Housing Market Index dropping 4 points to 40 in October.
This marks the third consecutive monthly decline due to high mortgage rates, which are now at a 23-year high. In an effort to attract buyers, home builders are turning to incentives such as buying down mortgage rates, and 32% of builders have cut home prices, CNBC reports.
“The housing affordability crisis can only be solved by adding additional attainable, affordable supply,” said Robert Dietz, NAHB’s chief economist. “Boosting housing production would help reduce the shelter inflation component that was responsible for more than half of the overall Consumer Price Index increase in September and aid the Fed’s mission to bring inflation back down to 2%. However, uncertainty regarding monetary policy is contributing to affordability challenges in the market.”
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