Latest news with #NationalAssociationofHomeBuilders
Wall Street Journal
11 hours ago
- Business
- Wall Street Journal
Housing Starts Weaken Amid Gloomy Builder Sentiment
Home-building lost ground in the U.S. last month as tariffs and labor issues bit into supply and high interest rates dragged on demand. Here are the main takeaways: from the Commerce Department's new report: Housing starts, a gauge of new residential construction, dropped nearly 10% in May to 1.26 million, according to a Commerce Department report Wednesday. That was down from a revised 1.39 million in April and was well below the expectations of economists surveyed by The Wall Street Journal. Starts were 4.6% lower on the year. Residential permits also fell by more than expected, to 1.39 million. President Trump's tariffs are hitting the construction sector, with builders reporting higher costs for materials, and many forced to pile on discounts to lure wary buyers. A crackdown on immigrant labor is also raising costs. Home-builder sentiment sunk to its lowest since 2022 and its third-lowest since 2012, the National Association of Home Builders said this week. High interest rates also are keeping mortgage rates at a level that dissuades many Americans to buy a house or move. 🏠 Dig deeper: Why Housing's Woes Are a Leading Indicator
The Hill
2 days ago
- Business
- The Hill
Housing starts drop to lowest level since pandemic
The number of housing units that started construction in May fell to the lowest level since 2020, as the sector battles headwinds blown by high interest rates. Housing construction dropped 9.8 percent from April to May, the Commerce Department reported Wednesday. If construction continued at that pace through the year, there would be 1.25 million units built in 2025, down from a pace of 1.39 million reached in April. The number is down 4.6 percent from a year ago, when the pace was 1.4 million units. 'Housing starts plunged in May as builders step back in 2025 amidst fading demand and rising costs,' Nationwide economist Ben Ayers wrote in a commentary. New building permits were down 2 percent from April. Housing completions were up 5.4 percent on the month but were still down 2.2 percent on the year. The housing sector was jolted by interest rate hikes delivered by the Federal Reserve in response to soaring post-pandemic inflation. While interest rate hikes combat inflation by slowing the pace of borrowing, they can also bolster the price of housing directly by making financing more expensive. Most housing is paid for with debt. Inflation as measured by the consumer price index (CPI) has fallen to an annual increase of 2.4 percent, but shelter inflation is still at 3.9 percent. Housing inflation has lagged headline inflation throughout the post-pandemic period. Rates on the 30-year fixed rate mortgage were at 6.84 percent this week, still way above pre-pandemic rates around 3.5 percent. Meanwhile, housing inventories are at their highest level since November 2019. The U.S. has a huge shortage of affordable housing. The National Association of Home Builders put the shortage at 1.5 million units in 2021 while government mortgage backer Freddie Mac put it at 3.8 million units and the National Association of Realtors estimated it at 5.5 million units. Analysts noted Wednesday that the May drop in starts was concentrated in multifamily construction, which does not bode well for the affordable housing shortage. 'A sharp downward shift in multifamily construction drove the decline in May,' Ben Ayers wrote.
Time of India
2 days ago
- Business
- Time of India
Homebuilder sentiment in USA skids to two and half years low in June: NAHB
A gauge of U.S. homebuilder sentiment slid unexpectedly to its lowest level in two and a half years in June, with more than a third of residential construction firms cutting prices to lure buyers sidelined by high mortgage rates and economic uncertainty due to President Donald Trump's tariffs. The National Association of Home Builders/Wells Fargo Housing Market Index fell to 32, the lowest reading since December 2022, from 34 in May. Economists polled by Reuters had expected the sentiment score to improve to 36. Measures of current sales conditions, future sales expectations and buyer foot traffic all fell. On a regional basis, the Northeast posted a small rise while the South, Midwest and West all declined. "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," Robert Dietz, NAHB 's chief economist, said in a statement. "Given current market conditions, NAHB is forecasting a decline in single-family starts for 2025." Mortgage rates remain elevated. The average rate on the most popular home loan, the 30-year fixed-rate mortgage, was 6.84% last week, according to home finance firm Freddie Mac, squarely in the middle of the 6.60% to 7.04% range over the past six months. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said NAHB Chairman Buddy Hughes, a home builder and developer based in Lexington, North Carolina. "To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices." The survey showed 37% of builders were cutting prices in June, the highest percentage since NAHB began tracking the metric on a monthly basis in 2022. That figure was up from 34% in May and 29% in April, while the average price cut held steady at 5%. The use of any kind of incentive ticked up a point to 62%.
Reuters
3 days ago
- Business
- Reuters
US homebuilder sentiment skids to 2-1/2-year low, NAHB says
June 17 (Reuters) - A gauge of U.S. homebuilder sentiment slid unexpectedly to its lowest level in two and a half years in June, with more than a third of residential construction firms cutting prices to lure buyers sidelined by high mortgage rates and economic uncertainty due to President Donald Trump's tariffs. The National Association of Home Builders/Wells Fargo Housing Market Index fell to 32, the lowest reading since December 2022, from 34 in May. Economists polled by Reuters had expected the sentiment score to improve to 36. Measures of current sales conditions, future sales expectations and buyer foot traffic all fell. On a regional basis, the Northeast posted a small rise while the South, Midwest and West all declined. "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," Robert Dietz, NAHB's chief economist, said in a statement. "Given current market conditions, NAHB is forecasting a decline in single-family starts for 2025." Mortgage rates remain elevated. The average rate on the most popular home loan, the 30-year fixed-rate mortgage, was 6.84% last week, according to home finance firm Freddie Mac, squarely in the middle of the 6.60% to 7.04% range over the past six months. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said NAHB Chairman Buddy Hughes, a home builder and developer based in Lexington, North Carolina. "To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices." The survey showed 37% of builders were cutting prices in June, the highest percentage since NAHB began tracking the metric on a monthly basis in 2022. That figure was up from 34% in May and 29% in April, while the average price cut held steady at 5%. The use of any kind of incentive ticked up a point to 62%.
CNBC
3 days ago
- Business
- CNBC
Homebuilder sentiment nears pandemic low as economic uncertainty plagues consumers
Higher mortgage rates and uncertainty in the broader economy continue to weigh on consumers — and consequently on the nation's homebuilders. Builder sentiment in June dropped 2 points from May to 32 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Anything below 50 is considered negative. The index stood at 43 in June 2024. Analysts had been expecting a slight improvement, given recent tariff negotiations and pullbacks by the Trump administration. This index has only seen a lower reading than June's level twice since 2012 – back in December 2022, after mortgage rates shot up from record lows during the first two years of the pandemic, and in April 2020 at the very start of the pandemic. Of the index's three components, current sales conditions fell 2 points to 35, sales expectations in the next six months dropped 2 points to 40, and buyer traffic fell 2 points to 21, the lowest reading on that metric since the end of 2023. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said Buddy Hughes, NAHB chairman and a homebuilder from Lexington, North Carolina, in a release. "To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices." In the June survey, 37% of builders said they had cut prices, the highest share since NAHB started tracking the monthly metric three years ago. That is up from 34% who reported cutting prices in May and 29% in April. The average price reduction was 5%, which has been steady since late last year. "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," said Robert Dietz, NAHB chief economist. "Given current market conditions, NAHB is forecasting a decline in single-family starts for 2025." The report follow quarterly earnings from Lennar, one of the nation's largest homebuilders, in which second-quarter average home price dropped nearly 9% from the same quarter in 2024. Guidance on new orders and deliveries was also below analysts' expectations. "As mortgage interest rates remained higher and consumer confidence continued to weaken, we drove volume with starts while incentivizing sales to enable affordability and help consumers to purchase homes," said Lennar co-CEO Stuart Miller in an earnings release. Regionally, on a three-month moving average, the South and West showed the weakest builder sentiment. Those are the regions where the most homes are built.
