Homebuilder Sentiment Drops for 3rd Month as Higher Rates Dampen Demand

Homebuilder sentiment dropped for 3rd straight month in October to lowest level since January 2023 due to higher mortgage rates reducing demand.

Builders reporting lower buyer traffic, especially among younger buyers getting priced out due to higher rates.

Rates above 7% in September throttled demand among prospective homebuyers. Rates expected to remain high as Fed keeps rates elevated longer.

Sentiment fell across all 4 regions in U.S. More builders using sales incentives to attract buyers.

Builders cutting prices to boost demand. Adding affordable supply would help reduce inflation and support Fed's mission per NAHB economist.