Builder confidence declined five points in September to a level of 45 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. It’s the first time the index has dropped below the break-even measure of 50 in five months, and follows a six-point drop in August.
NAHB cited high mortgage rates as a key factor in declining confidence in the housing market.
“The two-month decline in builder sentiment coincides with when mortgage rates jumped above 7% and significantly eroded buyer purchasing power,” NAHB Chairman Alicia Huey said in a statement. “And on the supply-side front, builders continue to grapple with shortages of construction workers, buildable lots and distribution transformers, which is further adding to housing affordability woes. Insurance cost and availability is also a growing concern for the housing sector.”
