US homebuilder sentiment falls in June amid rising costs

U.S. homebuilder sentiment has fallen to 35 in June, marking a 14-month low and its lowest point in over a decade. This decline is attributed to persistently elevated mortgage rates and high construction material costs, which are straining the housing market. The current sentiment level represents the longest streak below 40 since the Great Financial Crisis, indicating a prolonged period of builder pessimism.

Builders are responding to tepid spring sales and economic uncertainty by increasing the use of incentives and price cuts to move existing inventory. These measures aim to counteract the impact of rising costs and cooling demand, as the sector faces ongoing challenges.

In a separate development, Canadian housing starts experienced a 6% decrease in May. The seasonally adjusted annualized rate for housing starts fell to 261,377 units. This figure was a smaller decline than the 255,000 units that economists had anticipated. The revised figure for the previous month was 278,380 units.