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US builder confidence plunges as mortgage rates near 7% mark in August
Posted on August 18, 2023 |
Builder confidence declined in August after a steady 7-month rise due to nearing 7% mortgage rates and high shelter inflation.
August's Housing Market Index (HMI) fell 6 points to 50 for new single-family homes.
Shelter inflation is up 7.7% from last year, driving 90% of July's Consumer Price Index reading of 3.2%.
Need for housing solutions urgent as builder confidence weakens and housing units shortage reaches 1.5 million.
Rising mortgage rates prompt more builders to use sales incentives; 25% cut prices, and 55% use incentives to attract buyers.
All key HMI indices declined in August: current sales, sales expectations, and prospective buyer traffic.