Bloomberg News reports that homebuilder sentiment in the United States dropped in July to the lowest ever since May 2020 as the higher rates of interest and inflation have hurt buyer sales and traffic.
What’s More?
The National Association of Home Buyers/Wells Fargo gauge dropped to 55, the lowest recorded since May 2020, as per numbers manifested on Monday. The 12-point drop compared to the earlier month was the biggest since the beginning of the pandemic and the worst of all the estimates per economists’ Bloomberg Survey.
The homebuilder confidence is gradually sliding back as mortgage rates oscillate near the highest since 2008, making homes becoming expensive and less affordable. Simultaneously, the production bottlenecks and higher prices are forcing some builders to stop construction.
For the next six months, the sales expectations and buyer traffic as per the group’s gauge nosedived to the weakest limits since May 2020. As far as present sales are concerned, a measure of the same dropped to a two-year low approximately.
Robert Dietz, the chief economist, associated with NAHB, revealed in a statement that the greatest challenge is affordability ruling the housing market. He also said that the policymakers must address the issues related to supply sides to assist the builders in producing affordable housing.
Bloomberg News reports that builder sentiment dropped in all four regions geographically, which is led by a 16-point drop in the West.
