U.S. homebuilder confidence fell to its lowest level this year in November as high mortgage rates dampened demand for housing.
Data released Thursday showed the National Association of Home Builders/Wells Fargo index fell 6 percentage points this month to 34, below all expectations in a Bloomberg survey of economists.
High mortgage rates have hammered the housing market this year, exacerbating its deterioration affordability crisis However, U.S. Treasuries have risen in recent weeks on speculation that the Fed will no longer raise interest rates, leading to a pullback in borrowing costs.
“While builder confidence fell again in November, recent macroeconomic data suggests homebuilding conditions will improve in the coming months,” said NAHB Chief Economist Robert Dietz. “Given the lack of existing housing inventory, lower mortgage rates Will be reflected in prices.” Housing demand may improve builders’ view of market conditions in December. “
While recent reductions in financing costs have been welcomed by buyers and builders, developers are still extending various sales incentives, with about 36% of builders reporting price cuts in November, the highest level in a year.
The report showed declines in both current and expected sales metrics, as well as potential buyer traffic metrics. Confidence fell in three of the four regions, with the south and west falling to their lowest levels this year.
Headwinds facing the housing market are also weighing on home improvement retailers.analyst expected Home Depot Inc. and rival Lowe’s Cos. reported their first simultaneous decline in full-year revenue growth since fiscal 2010.