Homebuilders nationwide aren’t feeling so hot on the future

A nationwide index tracking homebuilder confidence dipped to its lowest point in over 2 years

TRD NATIONAL /
Nov.November 19, 2018 03:45 PM

Is the sun setting on a strong housing market? (Credit: iStock)

Confidence in the housing market among homebuilders has dropped to its lowest point in more than two years, another sign the market is cooling amid rising interest rates and rising prices.

The National Association of Home Builders/Wells Fargo Housing Market Index dropped eight points to 60, considerably more the single point drop expected by economists, according to Bloomberg.

The Federal Reserve has hiked the benchmark borrowing rate quicker this year than was expected, which has sent mortgage rates to recent highs and has slowed mortgage applications.

NAHB chief economist Robert Dietz called on policymakers to consider homebuilder confidence when crafting economic policy.

“Rising mortgage interest rates in recent months coupled with the cumulative run-up in pricing has caused housing demand to stall,” he said. “Given that housing leads the economy, policymakers need to focus more on residential market conditions.”

The Federal Reserve last raised the federal benchmark borrowing rate in September and is expected to raise it again in December, which would be the fourth hike in a year, one more than initially expected.

Shares for homebuilding companies fell and yields on 10-year Treasury bonds dipped following the release of the report. The sub-indexes for measuring current sales and prospective buyer traffic fell by seven and eight points, respectively, to their lowest points since August 2016.

President Trump’s tariffs on foreign goods also dented the market, market pros said, especially those on Canadian lumber and imported steel. [Bloomberg] — Dennis Lynch


Related Articles

arrow_forward_ios
Budapest (Credit: Pixabay)

This European city has the world’s fastest rising home price

250th Issue

The Real Deal celebrates 250 issues

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

56 Leonard Street (Credit: iStock)

He invested more than $130M into 4 Manhattan condos. Now he’s taking a hit

The bank is accused of systematically trying to foreclose on mortgages after the state’s six-year statute of limitations had passed. (Credit: iStock)

BNY Mellon faces suit over foreclosures from the housing crash

Nationwide foreclosures are at a 15-year low (Credit: iStock)

Foreclosures nationwide fell to 15-year low in 2019

Due to relatively high income levels and low transportation costs, New York City is the eight most affordable of 20 major cities (Credit: iStock)

NYC is the 8th most affordable big city in America*

53 West 53rd Street, 885 Park Avenue, 70 West 45th Street (Credit: StreetEasy)

Five priciest homes to hit the market last week all over $22M

arrow_forward_ios
Loading...