Key facts
- Homebuilder sentiment hit a near 14-1/2-year low in October.
- The NAHB/Wells Fargo Housing Market index fell to 29.
- The 30-year fixed mortgage rate averaged 7.40% last week.
- 43% of builders reported cutting prices to attract buyers.
US homebuilder sentiment fell to its lowest level in nearly 14-1/2 years in October, with the National Association of Home Builders/Wells Fargo Housing Market index dropping three points to 29. This decline was attributed to a surge in mortgage rates, which averaged 7.40% last week, and increased costs for building materials and energy, exacerbated by the Middle East conflict and tariffs. Persistent labor shortages, partly due to immigration enforcement, also contributed to construction delays. Builders are facing sagging demand, leading to excess inventory and price cuts, with 43% of them reducing prices to attract buyers. Measures of current and future sales, as well as prospective buyer traffic, all declined significantly.