US homebuilder sentiment drops to lowest level since end of 2022
Present sales index fell to lowest level since 2012
Confidence among US homebuilders fell in June to the lowest level since December 2022, with potential buyers deterred by high mortgage rates and anxiety about tariffs and the economy.
A gauge of market conditions from the National Association of Home Builders and Wells Fargo slipped 2 points to 32 this month. Economists expected 36 in a Bloomberg survey.
All three of the overall index’s components declined, with a measure of present sales falling to the lowest level since 2012. Gauges of traffic of prospective buyers and expected sales over the next six months are both at the weakest point in more than a year, NAHB data show.
The trade association is forecasting a decline in single-family starts this year, given weakening conditions, NAHB Chief Economist Robert Dietz said in a statement. To entice reluctant buyers, builders have increasingly relied on sales incentives and discounts. The share of respondents reporting cutting prices in June rose to 37%, the highest since NAHB started tracking it monthly in 2022.
“Rising inventory levels and prospective home buyers who are on hold waiting for affordability conditions to improve are resulting in weakening price growth in most markets and generating price declines for resales in a growing number of markets,” Dietz said.
Builders anticipate that President Donald Trump’s tariff policies could boost construction costs by almost $11,000 a home, based on a previous NAHB survey. And, while the supply of previously owned homes is growing and helping would-be buyers, it’s also providing more competition to the new-home industry.
Around the US, builder confidence in the South, the biggest homebuilding region, slipped to its lowest level since 2012.
The government’s monthly report on US housing starts will give another look at the new-home market on Wednesday.
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