U.S. Housing Confidence Suffers Another Blow

Homebuilder confidence — a monthly survey that gauges market conditions for the sales of new homes over the next six months in the United States — dropped for the fourth consecutive month in November, another victim of high-interest rates. Sentiment levels have been on a downturn since July and are at their lowest level since December 2022.

Many builders have reduced home prices to deal with mortgage rates of over 7 percent. The report showed that 36 percent of builders reported cutting home prices, up from 32 percent in the previous two months. The average price reduction in November remained at 6 percent, unchanged from October. 

Cooling inflation numbers are providing hope, however. The National Association of Home Builders (NAHB) is predicting an increase of 5 percent for single-family starts in 2024 as sentiment builds for rate cuts by the Federal Reserve.

The NAHB/Wells Fargo Housing Market Index measures the strength of the single-family housing market each month through surveys of NAHB members.

 

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