US homebuilder sentiment fell to the lowest level this year in November as high mortgage rates kept a lid on housing demand.
The National Association of Home Builders/Wells Fargo gauge decreased six points to 34 this month, according to data out Thursday. That was lower than all estimates in a Bloomberg survey of economists.
High mortgage rates have pummeled the housing market this year, worsening an affordability crisis that’s pushed out many prospective buyers. However, Treasuries have rallied in recent weeks on speculation that the Federal Reserve is done raising interest rates, which has caused borrowing costs to retreat somewhat.
“While builder sentiment was down again in November, recent macroeconomic data point to improving conditions for home construction in the coming months,” said NAHB Chief Economist Robert Dietz. “Given the lack of existing home inventory, somewhat lower mortgage rates will price-in housing demand and likely set the stage for improved builder views of market conditions in December.”
While the recent decline in financing costs has been welcomed by buyers and builders, developers are still extending a variety of sales incentives. Some 36% of builders reported cutting prices in November, the highest level in a year.
The report showed declines in measures of current and expected sales, as well as a gauge of prospective buyer traffic. Sentiment fell in three of four regions, dropping to the lowest level this year in the South and West.
The headwinds facing the housing market are also putting pressure on home-improvement retailers. Analysts expect both Home Depot Inc. and competitor Lowe’s Cos. to report their first simultaneous declines in full-year revenue growth since fiscal 2010.
Written by: Augusta Saraiva @Bloomberg
The post “US Homebuilder Sentiment Declines to Lowest Level This Year” first appeared on Bloomberg
BullsNBears.com was founded to educate investors about the eight secular bear markets which have occurred in the US since 1802. The site publishes bear market investing recommendations, strategies and articles by its analysts and unaffiliated third-party and qualified expert contributors.
No Solicitation or Investment Advice: The material contained in this article or report is for informational purposes only and is not a solicitation for any action to be taken based upon such material. The material is not to be construed as an offer or a recommendation to buy or sell a security nor is it to be construed as investment advice. Additionally, the material accessible through this article or report does not constitute a representation that the investments or the investable markets described herein are suitable or appropriate for any person or entity.