Main Topic: Decline in builder sentiment in the homebuilding market due to rising mortgage rates and high construction costs.
Key Points:
1. Builder sentiment dropped 6 points to 50 in August, the first decline in seven months.
2. Rising mortgage rates and high construction costs are impacting builder sentiment.
3. Buyer traffic and sales expectations have also declined, leading to more builders using sales incentives.
US mortgage applications for home purchases fell to their lowest level in 28 years, while refinancing also declined, as mortgage rates reached a 23-year high, according to data from the Mortgage Bankers Association.
The inventory of existing homes has been declining since the peak of the housing bubble in July 2007, with technology playing a key role in speeding up the processes involved in selling a home and reducing the time it takes for a home to sit in inventory.
Sales of existing homes have declined due to the rise in mortgage rates, but the demand for new homes is increasing as buyers are hesitant to sell their current homes with low-interest mortgages.
Despite high interest rates, house prices in the US have not declined, leading to frustration and confusion in the housing market as buyers face fierce competition and limited inventory.
Home prices in the U.S. rose for the fifth consecutive month in June, despite high mortgage rates, with national prices increasing by 0.9% and only down 0.02% from their peak in June 2022, according to the S&P CoreLogic Case-Shiller index. However, there were significant regional differences, with cities on the West Coast experiencing some of the biggest declines. The housing market continues to face challenges due to low inventory and slow new construction.
US housing inventory continues to be tight, with a 9.2% decrease in the number of homes for sale compared to last year, marking the fourth consecutive month of annual declines, although total inventory has shown monthly increases and is up 19% since January.
US mortgage rates have slightly decreased after five consecutive weeks of increases, but still remain above 7% due to inflation concerns. The combination of high rates and low housing inventory is making it more difficult for potential homebuyers to enter the market, leading to lower home sales.
The recent downturn in global property prices is ending as average home prices are expected to fall less than anticipated and rise into 2024, according to a Reuters poll, due to factors such as high savings, limited supply, and rising immigration. However, this poses challenges for first-time homebuyers and rental affordability is expected to worsen.
The number of homes for sale in the US continued to decline in August, down by 9.2% compared to the previous year and 45% below pre-pandemic levels, leading to higher home prices and affordability concerns.
Home prices, which had been steadily rising since January, may be starting to decline again due to weakening month-to-month gains and higher mortgage rates.
UK house prices have experienced their largest decline in 14 years, but despite fears of an impending crash, experts believe that the drop is unlikely to reach the levels seen during the global financial crisis in 2008 due to a more stable financial system, although prices may continue to slowly decline or stagnate and be eroded by inflation.
Demand for mortgages in the US has hit a 28-year low, with purchase applications falling to the lowest level since December 1996, despite a decrease in mortgage rates.
Mortgage application volume declined to its lowest level since December 1996, despite a slight decrease in mortgage interest rates, due to high rates compared to a year ago and low housing inventory.
The gauge of US mortgage applications for home purchases fell to a 28-year low last week due to high mortgage rates, making homeownership less affordable and driving housing affordability to its worst point in decades.
US mortgage rates have decreased slightly for the second consecutive week, but they remain above 7%, causing home affordability to reach its lowest level in nearly four decades.
Canadian housing starts declined by 1% in August, with a drop in groundbreaking on multi-unit projects being a contributing factor, according to data from the Canadian Mortgage and Housing Corporation.
Builder confidence in the US housing market unexpectedly dropped for the second consecutive month in September, as high mortgage rates dampened consumer demand for new homes.
U.S. homebuilding hit a three-year low in August due to a decrease in demand caused by higher mortgage rates, while permits for future construction rose, suggesting support from limited housing inventory.
The U.S. housing market is facing a shortage of homes, which is driving up prices and making it difficult for buyers to find affordable options, and the problem may get worse as builders become less confident and hesitant to construct new homes due to high mortgage rates and construction costs.
New home construction in the U.S. has plummeted to a three-year low due to high mortgage rates, increased labor costs, and the rising price of building homes, leading to a significant decline in both single-family and multifamily starts.
The pace of new construction in the housing market slowed in August due to high mortgage rates and weakening demand, with housing starts falling to the lowest level since 2020, although building permits increased month over month.
US housing starts fell to their lowest level in three years, indicating a slowdown in homebuilding activity due to mortgage rates lingering above 7%.
The United States housing market has seen a 21 percent decline in previously occupied home sales over the past year, continuing the slowdown caused by rising interest rates, while prices continue to rise despite the decrease in sales, leading to a shortage of affordable homes and worsening home affordability for the foreseeable future.
Sales of previously owned homes in the US fell for the third consecutive month in August, as higher mortgage rates, rising prices, and a lack of available properties have limited homebuyers' options.
U.S. existing home sales fell 0.7% in August due to high mortgage rates and a worsening supply shortage, with prices reaching a record high.
The U.S. housing market continued to see slight growth in home prices in July, reaching a new all-time high, despite higher mortgage rates, and while Dallas-Fort Worth experienced a slower growth rate compared to the previous month, prices have started to decline in August.
Mortgage applications and housing demand have dropped as a result of increased mortgage rates, which are now at their highest levels in over 20 years, leading to limited inventory and fewer options for buyers.
As the US housing market starts to cool down, homebuyers are being presented with a good opportunity as more homes see price reductions, according to Zillow, with 9.2% of listings having a price cut in the week ending September 16, a higher rate than in 2019.
The fall housing market is experiencing a decrease in home sellers and a limited inventory, leading to high prices and limited affordability, although there is some potential for buyers to find more reasonably priced homes.
Sentiment in the US housing market declined due to rising mortgage rates, with buyers anticipating higher home prices in the future, according to Fannie Mae data.
The metro Atlanta housing market saw a decline in September due to the highest mortgage rates since 2000, resulting in a decrease in home sales and total value; the market has also experienced a shortage of inventory, leading to a seller's advantage despite rising mortgage rates.
September saw a significant decline in home sales, with the lowest tally since 1995 and a 32 percent drop from the previous year, due to high interest rates and homeowners' reluctance to sell and move to a place with a higher monthly payment, leaving few options for prospective buyers.
Confidence among builders in the U.S. housing market has fallen for the third consecutive month due to higher mortgage rates, leading to decreased demand for new homes. The National Association of Home Builders/Wells Fargo Housing Market Index dropped to 40, the lowest reading since January 2023, reflecting concerns about buyer traffic and housing affordability.
Homebuilder confidence in the US dropped to its lowest level in 10 months due to high mortgage rates, which have led to lower buyer traffic and decreased housing affordability.
New U.S. home construction rebounds in September, despite high mortgage rates, with housing starts rising 7%, but applications to build and building permits show a decline compared to last year.
