U.S. Housing Market Index Pulls Back To One-Year Low In September
(RTTNews) - Homebuilder sentiment in the U.S. has deteriorated by much more than anticipated in the month of September, according to a report released by the National Association of Home Builders on Wednesday.
The report said the NAHB/Wells Fargo housing market index fell to 32 in September after inching up to 35 in August. Economists had expected the index to edge down to 34.
With the bigger than expected decrease, the housing market index dropped to its lowest level since hitting a matching reading a year ago.
"Buyer traffic has weakened across much of the country, largely because of rising mortgage rates," said NAHB Chairman Bill Owens. "Builders also continue to face higher material costs, rising gas and diesel prices and persistent labor shortages."
He added, "In some markets, builders report that increased immigration enforcement is discouraging legal workers from reporting to job sites."
The pullback by the headline index partly reflected a steep drop by the index gauging future sales expectations, which plunged to 37 in September from 43 in August.
The index measuring current sales condition also tumbled to 35 in September from 39 in August, while the index charting prospective buyer traffic held steady at 23.
The NAHB also said the latest HMI survey found that 38 percent of builders cut prices in September, up from 35 percent in August. The average price cut remained at 6 percent for the sixth consecutive month.
Meanwhile, the report said 66 percent of builders reported using sales incentives in September, up from 63 percent in August and the highest share since 67 percent in December.
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