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Homebuilder Confidence Reaches 12-Month Low Amid Elevated Mortgage Rates, Material Costs

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Homebuilder Confidence Reaches 12-Month Low Amid Elevated Mortgage Rates, Material Costs

US homebuilder confidence this month hit its lowest level since September 2025 amid elevated mortgage rates and increasing material costs, the National Association of Home Builders and Wells Fargo said Wednesday.

The housing market index, which covers new single-family homes, dropped three points sequentially to 32 in September. The consensus was for a 34 reading in a survey compiled by Bloomberg.

"Buyer traffic has weakened across much of the country, largely because of rising mortgage rates," NAHB Chairman Bill Owens said. "Builders also continue to face higher material costs, rising gas and diesel prices and persistent labor shortages."

Separately, the Mortgage Bankers Association said Wednesday that mortgage applications in the US declined last week. The average interest rate for 30-year fixed mortgages with conforming loan balances of $832,750 or less jumped to 6.97% from 6.85% sequentially, the highest it's been since May 2025, according to that report.

US retail gasoline prices averaged $4.3672 per gallon Wednesday, compared with $4.0656 a month ago and $3.1862 a year ago, according to data from AAA, a travel organization that tracks fuel prices in the country.

"Tight lending conditions and elevated land, labor and construction costs persist," NAHB Chief Economist Robert Dietz said. Some 42% of homebuilders rated current lot availability as poor, while 38% saw it as fair, according to Dietz.

The index measuring current sales conditions dropped four points to 35 in September, while gauge for future sales expectations lost six points to 37. About 38% of builders reduced prices this month, up from 35% in August, while 66% said they used sales incentives, compared with 63% last month, the report showed.

In a note to clients Wednesday, Truist Securities said Meritage Homes (MTH) and other homebuilders will likely need to increase buyer incentives amid high mortgage rates and weak demand.

Last week, the National Association of Realtors said August existing home sales in the US hit the lowest level since June 2025 amid persistent affordability headwinds.

Price: $65.40, Change: $-0.39, Percent Change: -0.59%

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South32 Eyes Higher Operating Margin After Alcoa Deal Slims Portfolio
US Markets

South32 Eyes Higher Operating Margin After Alcoa Deal Slims Portfolio

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ASX:AAIASX:S32
Trip.com Swings to Quarterly Loss as China Antitrust Penalty Offsets Revenue Jump
US Markets

Trip.com Swings to Quarterly Loss as China Antitrust Penalty Offsets Revenue Jump

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HKG:9961
Update: Equities Log Back-to-Back Declines Before Fed Decision as Yields, Oil Jump
US Markets

Update: Equities Log Back-to-Back Declines Before Fed Decision as Yields, Oil Jump

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