Overview
- The NAHB/Wells Fargo Housing Market Index dropped to 29 on Monday, the lowest reading since June 2012 and signalling sharp souring of builder sentiment.
- The average 30-year fixed mortgage rate has risen to about 7.4 percent, which has cut buyers’ purchasing power and sent pending home sales to record lows in September.
- Contracts for existing homes fell 7.3 percent month‑over‑month and 11.3 percent year‑over‑year in September, a series low that usually predicts weaker closings in the next one to two months.
- Builders are reacting by cutting prices and offering incentives with 43 percent reporting price reductions averaging about 6 percent and roughly 65 percent using sales incentives.
- New construction is cooling: single-family starts fell about 4.6 percent and single-family permits dropped roughly 4.0 percent in September, while builders cite higher material, energy and financing costs and labor pressures.