Homebuilder sentiment is at a 14-year low
Summary
Homebuilding activity in the U.S. has dropped to its lowest level in many years because borrowing money is more expensive and construction materials are harder to get. Fewer houses are being started and sold, which is causing problems for both builders and buyers.Key Facts
- Housing starts fell 5.2% in September to 1.22 million units and are down 7.4% from last year.
- Starts of single-family homes dropped 4.6%, reaching the lowest point since March 2023.
- Pending home sales decreased by 7.3%, hitting the lowest level since 2001.
- Homebuilder confidence is at its lowest since 2012.
- The average 30-year mortgage rate is about 7.4%, near the highest in over 20 years.
- Builders face higher costs for labor and materials like copper, concrete, and HVAC equipment.
- Immigration policies have reduced the number of construction workers, causing project delays.
- Residential investment has reduced the overall economic growth in most recent quarters.
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