Business

Builders say the US is in a housing downturn


A worker drills plywood on a family home under construction in Lehi, Utah, on Friday, January 7, 2022.

George Frey | Bloomberg | beautiful pictures

Builders’ sentiment in the single-family home market fell to negative in August, as builders and buyers grapple with higher costs.

The National Association of Builders/Wells Fargo housing market index fell 6 points to 49 this month, the eighth straight monthly decline. Anything over 50 is considered positive. The index hasn’t been in the negative territory since a very brief plunge at the beginning of the year Covid pandemic. Before that, it had not been negative since June 2014.

“Tighter monetary policy from the Federal Reserve and consistently high construction costs have led to a housing downturn,” said NAHB chief economist Robert Dietz.

Of the three components of the index, current sales conditions fell 7 points to 57, sales expectations over the next six months fell 2 points to 47, and buyer traffic fell 5 points to 32.

Despite higher costs of land, labor and materials, about a fifth of builders in August reported price cuts over the past month in an effort to boost sales or limit cancellations. The average reduction reported was 5%.

The biggest barrier for buyers right now is affordability. Home prices have risen since the start of the pandemic, and the average 30-year fixed-mortgage rate, which hit historic lows during the early part of the pandemic, is nearly double what it was earlier this year. Home price growth has cooled somewhat in recent weeks, while mortgage rates have dropped from highs.

“Total single-family volume will decline in 2022, the first decline since 2011. However, as signs rise that inflation is nearing a peak, long-term interest rates have stabilized, this should bring stability to the demand side of the market in the coming months,” Dietz said.

By region, above the three-month moving average, builders confidence in the Northeast fell 9 points to 56 and fell 3 points in the Midwest to 49. In the South, it fell 7 points to 63 and in the South West, where house prices are at their highest, it fell 11 points to 51.



Source link

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button