Wednesday, July 24, 2024

U.S. Housing Market Reaches New Low

The U.S. housing market continues to deteriorate.

Members of the Washington, D.C.-based National Association of Home Builders (NAHB) announced Monday that, as of September, builder sentiment fell for the ninth straight month. The combination of elevated interest rates, persistent building material supply chain disruptions, and high home prices continue to take a toll on affordability, group members said in a statement

“Builder confidence in the market for newly built single-family homes fell three points in September to 46, the lowest level since May 2014 with the exception of the spring of 2020,” NAHB members said.

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NAHB Chairman Jerry Konter said buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households.

Meanwhile, 24 percent of builders reported reducing home prices, up from 19 percent last month.

NAHB Chief Economist Robert Dietz said builder sentiment has declined every month in 2022. The housing recession shows no signs of abating as builders continue to grapple with elevated construction costs and an aggressive monetary policy from the Federal Reserve that helped pushed mortgage rates above 6 percent last week, the highest level since 2008.

In a survey, more than half of home builders reported using incentives to bolster sales, including mortgage rate buydowns, free amenities and price reductions.

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As reported last month, new home sales are down 29.6 percent from a year ago, per NAHB data. New home sales fell in July to their lowest level since January 2016. 

The median sales price rose to $439,400 in July, up 5.9 percent compared to June, and is up 8.2 percent compared to a year ago. Regionally, on a year-to-date basis, new home sales fell in all four regions, down 14.9 percent in the Northeast, 26.5 percent in the Midwest, 13.4 percent in the South, and 15.7 percent in the West.” 

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