The National Association of Home Builders’ Housing Market Index for November showed builders’ growing concerns over U.S. housing market conditions. November’s index reading dropped five points to 33 as compared to October’s reading of 38 and the November 2021 reading of 83. November’s home builder index reading was the lowest reading since June 2012 except during the pandemic. Readings over 50 indicate that most home builders were positive about housing market conditions.
All three index readings that contribute to the HMI reading were also lower. Builder confidence in current housing market conditions fell six points to an index reading of 39. Home builder sentiment over housing markets in the next six months fell four points to an index reading of 31. Home builder expectations for prospective buyer traffic in new housing developments fell five points to November’s reading of 20.
Home Builders Face Multiple Challenges
Home builders continued to face obstacles including rising materials costs and falling demand for homes. Rising mortgage rates and home prices sidelined potential buyers. The Federal Reserve’s decision to raise its target interest rate range to slow inflation caused mortgage rates to rise; home builders asked lawmakers to lower costs related to land development and home construction to offset the impact of rising mortgage rates.
NAHB chairman Jerry Konter said: “Higher interest rates have significantly weakened demand for new homes as buyer traffic is becoming increasingly scarce. With the housing sector in a recession, the administration and new Congress must turn their focus to policies that lower the cost of building and allow the nation’s home builders to expand housing production.”
Builders reported offering buyer incentives including mortgage rate buydowns, paying discount points for buyers, and reducing home prices. 37 percent of home builders cut prices in November as compared to 26 percent in September. Price reductions averaged 6 percent. Current home price reductions were lower than reductions of 10 to 12 percent seen during the Great Recession in 2008.
NAHB Chief Economist Robert Dietz said, “To ease the worsening housing affordability crisis, policymakers must seek solutions that create more affordable and attainable housing.” Regional readings for home builder confidence were also lower. Builder sentiment in the Midwest fell 2 points to 38; Builder sentiment in the Northeast fell 6 points to 41, and builder sentiment in the South fell 7 points to 42. Home builder sentiment in the West fell 5 points to an index reading of 29.
There are many people who dream of owning a home, but you need to purchase your home for the right reasons. Simply purchasing a house because other people are doing so is not a strong reason to make such an expensive purchase. What are some of the reasons why you should purchase a house? What are some examples of bad reasons to buy a home?
Whether you’re a first-time homebuyer or an experienced real estate investor, if you are planning to borrow funds to buy a home you will want to choose the right mortgage product. In today’s blog post we’ll explore how interest-only mortgages work and why they’re the perfect choice for some homebuyers.
Last week’s scheduled economic news included readings on monthly and year-over-year inflation and the University of Michigan’s preliminary reading on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.
U.S. military veterans have opportunities to enjoy some richly-deserved benefits in other aspects of their lives, including some special options for financing their homes. VA loans may give active military personnel, retired veterans, and sometimes surviving family members of veterans the ability to purchase homes that might not prove available to them through more conventional mortgage loans.
With the new year right around the corner, that leaves you with precious little time to get your finances in order. Let’s explore a few tips that will help you get a jump on improving your credit score before the end of the year.
What do you need to do if you want to improve the safety and functionality of your home? You may not think that your home has a lot of safety hazards, but you might be surprised at how many people get hurt at home every year. Particularly if you have older people in your home, or if you have people in your house with disabilities, you need to pay close attention to your safety and functionality. What are a few tips you should keep in mind? 
There are some people who are able to pay cash for a home. Typically, these are individuals who are selling an existing property that has gone up in value. Now, all of a sudden, they have a lot of extra money they can spend on a house. If you can pay cash for a home, you have a lot of extra negotiating power. When it is time to complete the sale, who pays?
Last week’s economic reporting included the Federal Reserve’s statement on its target interest rate range and Fed Chair Jerome Powell’s regularly-scheduled press conference. Data on construction spending and public and private-sector jobs was published along with weekly reports on mortgage rates and jobless claims.
Are you starting to tire of paying your monthly rent to someone and never building any equity? Renting forever can be a significant pain, especially as you’re contributing to someone else’s financial well-being. The good news is that there are affordable real estate options out there for those investing in their first home. Below we will share a few excellent reasons why an apartment or condo might be the best choice for a first-time home buyer.