A measure of US homebuilder sentiment dropped for a 10th straight month in October, hitting the lowest level since the early days of the pandemic and illustrating a housing market battered by soaring mortgage rates.
The National Association of Home Builders/Wells Fargo gauge decreased 8 points to 38, the weakest since May 2020, figures showed Tuesday. The gauge was weaker than the most pessimistic forecast in a Bloomberg survey of economists.
Sentiment has fallen every month this year, extending what was already the longest stretch of declines in data back to 1985.
“While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers,” NAHB Chief Economist Robert Dietz said in a statement.
The housing market has been the clearest sign yet of the Federal Reserve’s policies working their way through the economy, sending mortgage rates to a 20-year high.
With the central bank signaling it’ll stay on an aggressive path of interest-rate hikes to stomp out decades-high inflation, there’s likely more pain ahead for the real estate sector.
The report’s measure of future sales slid 11 points to 35, the lowest since 2012, while indexes of current sales and prospective buyer traffic weakened to the softest levels since May 2020.
Builder sentiment weakened in all regions but the Northeast. In the West, it fell to a 10-year low.
Source: bnnbloomberg.ca
