Builders are Cutting Prices, Adding Incentives as Confidence Wanes

The National Association of Home Builder’s (NAHB’s) index measuring the confidence of builders in the new home market has fallen for the ninth straight month. A 3-point month-over-month drop put the NAHB/Wells Fargo Housing Market Index (HMI) at 46 in September. NAHB’s chief economist Robert Dietz said, with the exception of the period immediately after the onset of the 2020 pandemic, the index was at its lowest point since May 2014. The continuing decline in the index is another sign that elevated interest rates, persistent building material supply chain disruptions and high home prices are combining to take a toll on affordability, Dietz said. The HMI is projecting an ongoing decline in the volume of single-family housing starts, as noted in the graph below. The HMI is derived from a monthly survey that gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. All three of the index’s components posted fell from their August levels. The component derived from questions about current sales conditions dropped 3 points to 54, while future sales expectations and perceptions of buyer traffic were each down 1 point to 46 and 31, respectively.

September 19, 2022 Download our Mobile App: Download our Mobile App: Housing News Builders are Cutting Prices, Adding Incentives as Confidence Wanes The National Association of Home Builder’s (NAHB’s) index measuring the confidence of builders in the new home market has fallen for the ninth straight month. A 3-point month-over-month drop put the NAHB/Wells Fargo Housing Market Index (HMI) at 46 i... (read more) MBS Commentary Bond Buyers on Strike Until They Hear From The Fed Bond Buyers on Strike Until They Hear From The Fed There were a few way the run up to this week's Fed announcement could have gone. One of them involved the market realizing that it had sufficiently pri... (read more) Mortgage Rate Watch Mortgage Rates Surging to New 14-Year Highs Mortgage rates had another moderately bad day to start the new week. The unfortunate thing about moderately bad days that occur when rates were already at 14 year highs is that we're left with another new 14-year high. There were n... (read more) Rob Chrisman Housing Correction, Industry Events, Vendor Services; All Eyes on Fed This Week In the words of former Vice President Dan Quayle, “We are ready for any unforeseen event that may or may not occur.” Around the world, soaring borrowing costs are squeezing homebuyers and property owners alike. So, what does the public see in terms o... (read more) Mortgage Rates Mortgage Rates Surging to New 14-Year Highs 30 Yr. Fixed Rate 6.42% +0.07% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.42% +0.07 0.00 15 Yr. Fixed 5.70% +0.05 0.00 30 Yr. FHA 6.12% +0.37 0.00 30 Yr. Jumbo 5.74% +0.04 0.00 5/1 ARM 6.13% +0.01 0.00 30 Yr. VA 6.15% +0.30 0.00 Updates Daily - Last Update: 9/19 15 Yr. Fixed Rate 5.70% +0.05% Rate Change Points Freddie Mac 30 Yr. Fixed 5.89% +0.23 0.70 15 Yr. Fixed 5.16% +0.18 0.80 5/1 Yr. ARM 4.64% +0.13 0.40 Updates Weekly - Last Update: 9/8 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.01% +0.07 0.76 15 Yr. Fixed 5.30% +0.07 0.89 30 Yr. Jumbo 5.56% +0.10 0.39 Updates Weekly - Last Update: 9/14 MBS / Treasuries Bond Buyers on Strike Until They Hear From The Fed UMBS 30YR 4.5 97.53 -0.27 Price / Yield Change MBS UMBS 4.5 97.53 -0.27 UMBS 5.0 99.36 -0.25 GNMA 4.5 98.22 -0.34 GNMA 5.0 99.98 -0.27 Pricing as of: 9/19 5:41PM EST 10 Year US Treasury 3.4944 +0.0391 Price / Yield Change US Treasury 2 YR Treasury 3.946 +0.075 5 YR Treasury 3.689 +0.053 7 YR Treasury 3.617 +0.047 10 YR Treasury 3.494 +0.039 30 YR Treasury 3.516 -0.004 Pricing as of: 9/19 5:41PM EST Latest Video The real challenge is how long these real estate market conditions last, sa... The Fed will push until something breaks, says Guggenheim's Scott Minerd Homebuilder sentiment fell three points in September, the lowest level sinc... The 9am Bond Report - September 19, 2022 Around the Web CNBC More homebuilders lower prices as sentiment falls for ninth straight month Realtor.com Home-Goods Retailers Jolted by Slowdown in Housing Market CFPB CFPB Annual Report of 2021 Mortgage Market Activity Reveals an End to the Refinancing Boom and an Increase in Home Purchase Loan... Calculated Risk Blog Housing September 19th Update: Inventory Increased 0.9% Last Week Calculated Risk Blog California Home Sales off 24% YoY in August, Prices Up Only 1.4% YoY; August Existing Home Sales Forecast CNBC Treasury yields tick higher as traders anticipate the Fed's next move Calculated Risk Blog Q3 GDP Tracking: Close to 1% Eye on Housing Decline in Single-Family Permits in July 2022 CNBC 2-year Treasury note tops 3.9% as investors anticipate further Fed rate hikes Reuters Euro Zone Inflation Confirmed at 9.1% as Energy, Food Prices Surge CNBC European stocks set to slip at the open as traders await this week's Fed meeting Fannie Mae Retail Sales, Industrial Production Soften as Core Inflation Comes in Hotter than Expected CNBC European markets set to open lower as rate hike and energy fears persist

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