National Association of Home Builders (NAHB) /Wells Fargo Housing Market Index (HMI) fell three points to 29 in October.
This repeats the three-point drop reported in September. Builder confidence sits at its lowest since 2012.
Buyer traffic also took a hit, despite 43% of builders cutting prices and 65% of builders offering sales incentives.
Regionally, the brightest spot is the Midwest, with permits up 2.9% and a HMI of 40. The Northeast and South both fell one point to 38 and 30. The West remains the slowest market, declining to 26.
“Housing remains squeezed by supply-side constraints and significant affordability challenges,” said NAHB Chief Economist Robert Dietz. “Mortgage rates have climbed well above 7% in recent weeks. Though builders are also contending with higher costs for construction loans, building materials and diesel, the administration’s efforts to advance regulatory reform are helping to ease some of the cost pressures they face.”
Reflecting these policy shifts, the U.S. Department of Commerce is cutting duties on Canadian softwood lumber imports, while efforts are underway to suspend tariffs on all building materials through the Housing Tariff Exclusion Act.
