With mortgage rates approaching 8 percent earlier this month, the National Association of Home Builders released a report on Thursday unexpectedly showing a continued deterioration in U.S. homebuilder confidence in the month of November.<\/p>\n
The report said the NAHB\/Wells Fargo Housing Market Index slumped to 34 in November from 40 in October, while economists had expected the index to come in unchanged.<\/p>\n
The housing market index decreased for the fourth consecutive month, falling to its lowest level since hitting 31 in December 2022.<\/p>\n
The unexpected drop by the housing market index in November came as all three of the component indices fell during the month.<\/p>\n
The index gauging current sales conditions fell six points to 40, the component charting sales expectations in the next six months dropped five points to 39 and the gauge measuring traffic of prospective buyers dipped five points to 21.<\/p>\n
The NAHB noted almost all of the data for November was collected before the latest Consumer Price Index was released and showed that inflation is moderating.<\/p>\n
“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. <\/p>\n
He added, “In particular, the 10-year Treasury rate moved back to the 4.5% range for the first time since late September, which will help bring mortgage rates close to or below 7.5%.”<\/p>\n
The NAHB forecast an approximately 5 percent increase in single-family housing starts in 2024 as financial conditions ease with improving inflation data in the months ahead.<\/p>\n
On Friday, the Commerce Department is scheduled to release its report on new residential construction in the month of October.<\/p>\n
Housing starts are expected to dip to an annual rate of 1.350 million in October, while building permits are expected to decrease to an annual rate of 1.450 million. <\/p>\n