Every month, the National Association of Home Builders’ Housing Market Index and the new residential construction numbers from the U.S. Census Bureau and the Department of Housing and Urban Development are released. The two reports give us a view of how home builders are feeling and how many new homes they’re building. According to this month’s data, new home construction is showing signs of slowing. In fact, the number of homes that began construction during the month of September was 4.7 percent lower than the month before. Similarly, the NAHB’s index – which measures builders’ perceptions of the new home market – fell for the tenth consecutive month, indicating home builders are feeling less optimistic about the market. So what’s behind the declines? Jerry Konter, NAHB’s chairman, says higher mortgage rates. “High mortgage rates … have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” Konter said. With buyer demand down, home builders are feeling less confident in the market and have begun to slow plans for future new home construction. (source)
