The roof is caving in on the American housing market, and the home-building industry is putting the blame on the Biden White House.,
The National Association of Home Builders’ monthly index fell 8 points to 38, a drop 3 points beyond expectations. Readings below 50 are taken as a sign of pessimism.
High mortgage rates are part of the problem. Mortgage rates currently hover at about 7.05 percent, hitting one of their highest levels since 2008, according to Forbes.
The US Housing Market Index (measure of homebuilder confidence) fell for the 10th consecutive month to its lowest level since May 2020.
— Charlie Bilello (@charliebilello) October 18, 2022
The high mortgage rates “have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” NAHB Chairman Jerry Konter said, according to the Post.
“This situation is unhealthy and unsustainable. Policymakers must address this worsening housing affordability crisis,” he said.
The survey’s results were “disastrous” and showed there is “no bottom yet” for the housing market, according to Ian Shepherdson, chief economist at the research and consulting firm Pantheon Macroeconomics, the Post reported.
US Homebuilder Confidence Collapses In October, Future Sales Hope Hits Decade-Lows https://t.co/3Mmeg9cMeG
— zerohedge (@zerohedge) October 18, 2022
“The plunge in the NAHB index makes it clear that the reported jump in new home sales in September was much more noise than signal,” Shepherdson wrote in a note to Pantheon clients, according to the Post.
“In short, housing is in free fall. So far, most of the hit is in sales volumes, but prices are now falling too, and they have a long way to go.”
Pantheon has “no faith at all that mortgage applications have stopped falling,” he wrote, noting that the firm expects that home sales will drop at least through the early part of 2023.
Appearing on Fox Business News “Varney & Co.” on Tuesday, Jerry Howard, CEO of the National Association of Home Builders, said the Biden administration is ignoring the real issues hurting the building industry.
Instead, he said, it’s focused on window-dressing programs, like tax credits for homeowners who weatherize their homes. The practical benefit, he said, is minimal.
The administration, he told host Stuart Varney, is “just putting Band-Aids on everything, playing a shell game.”
And that isn’t boosting home builder confidence.
“This is the 10th month in a row it’s gone down. I don’t see any reason why it’s going to come back up any time soon,” Howard said.
“We’re still having supply chain problems, we’re still having problems with increased regulation … Right now, the home building sector is facing a perfect storm.”
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