As confidence in the market continues to plummet, more builders are lowering prices.
The National Association of Home Builders/Wells Fargo Housing Market Index shows homebuilders' sentiment falling in September. Negative is defined as anything below 50.
That is the ninth straight month of decreases and the lowest level since the beginning of the coronaviruses epidemic in 2020. Interest rates were half of what they were in January of this year.
Builders blame rates for their decline. According to Mortgage News Daily, the average on the 30-year fixed started this year at 3% and then rose steadily, reaching 6 percent in June. After hitting 5% in August, it fell back a bit and rose again in the month of September. It made the market even more expensive. The Federal Reserve is expected to raise its rate again this week.
The chairman of the NAHB said that high mortgage rates and home prices are putting a new home purchase out of reach for many households.
Konter said that nearly a quarter of homebuilders lowered home prices.
Current sales conditions fell three points to 54, sales expectations fell one point to 46, and buyer traffic fell one point to 31.
Builders are reporting higher construction costs as well as higher interest rates. Builders are being forced to lower prices because of higher costs for land, labor and materials.
Robert Dietz, NAHB's chief economist, said that more than half of the builders in the survey used incentives to boost sales.
Sentiment in the Northeast fell five points to 51 and in the Midwest it fell five points to 44. Sentiment fell in the South to 56 and in the West to 41.