American homebuilder confidence crashed to 29 in October - down from 32 in September and worse than the 31 print expected as rising mortgage rates, energy and material costs, and worsening labor and lot conditions have pushed builder sentiment to a 14-year low.
All three of the major HMI indices posted losses in October.
The index measuring current sales conditions fell two points to 33, the index gauging future sales expectations dropped five points to 32 and the index charting prospective buyer traffic fell five points to 18.
“Mortgage rates have climbed well above 7% in recent weeks, and higher gas prices and inflation have further weakened buyer traffic across much of the country,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio.
“Though builders are also contending with higher costs for construction loans, building materials and diesel, the Trump administration’s efforts to advance regulatory reform are helping to ease some of the cost pressures they face. Nationwide, more than one-third of builders reported immigration enforcement activity in their market areas during the past month, causing construction delays and discouraging legal workers from reporting to work.”
Judging by Future Sales expectations, builders are not going to be adding any new supply in a hurry...
“Housing remains squeezed by supply-side constraints and significant affordability challenges,”
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