Builder Confidence Falls to 29 in October, Lowest Since June 2012, as 43% of Builders Cut Prices
WASHINGTON — Builder confidence in the market for newly built single-family homes fell three points to 29 in October, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released on October 19. The reading was the lowest since June 2012, NAHB said, and any number below 50 indicates that more builders view conditions as poor than good. (GSM, compiled from the NAHB press release of October 19)
All three major HMI indices posted losses in October. The index measuring current sales conditions fell two points to 33, the index gauging future sales expectations dropped five points to 32, and the index charting prospective buyer traffic fell five points to 18. "Housing remains squeezed by supply-side constraints and significant affordability challenges," said NAHB Chief Economist Robert Dietz. "Demand persists, but higher mortgage rates, elevated construction costs and weaker consumer confidence are keeping more buyers on the sidelines. As a result, buyer traffic has fallen to its lowest level since April 2012, excluding the pandemic's onset in April 2020."
"Mortgage rates have climbed well above 7% in recent weeks, and higher gas prices and inflation have further weakened buyer traffic across much of the country," said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. Owens said builders are also contending with higher costs for construction loans, building materials and diesel, and noted that more than one-third of builders nationwide reported immigration enforcement activity in their market areas during the past month, causing construction delays and discouraging legal workers from reporting to work. He added that the administration's efforts to advance regulatory reform are helping to ease some of the cost pressures builders face.
The October survey found that 43% of builders cut prices, the highest share during the 2020–2026 period, while the average price cut remained at 6% for the seventh consecutive month. Meanwhile, 65% of builders reported using sales incentives, the 19th straight month at least 60% of builders have done so. On a regional basis, the three-month moving average HMI fell in all four Census regions: the Northeast dropped one point to 38, the Midwest fell three points to 40, the South fell one point to 30 and the West declined two points to 26. NAHB noted the Midwest is a relative bright spot, with single-family permits up 2.9%. The HMI is derived from a monthly survey NAHB has conducted for more than 40 years.
Published by GSM · USA (original Chinese edition)
Photo: 维基共享资源 · CC BY-SA 4.0 · 作者：CassieMCassid
