It appears delusion and hope can only last so long – even when one’s salary depends on it – as US homebuilder confidence crashed to COVID lockdown lows in October after refusing to see what everyone else was seeing more months.. and what homebuyers were clearly feeling as prices soared along with mortgage rates and devastated affordability for most Americans. Against expectations of a small drop from 46 in September to 43 in October, the headline confidence index crashed to 38 – its lowest since the nadir of COVID-lockdown panic (that was worse than the weakest forecast of all economists surveyed)…
This the 10th straight monthly decline in homebuilder confidence – the longest losing streak since data began in 1985.
“While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers,” NAHB Chief Economist Robert Dietz said in a statement.
Under the hood, the report’s measure of future sales slid 11 points to 35, the lowest since 2012, while indexes of current sales and prospective buyer traffic weakened to the softest levels since May 2020.
This could be a very serious problem…
The collapse in Buyer Traffic is coming JUST AS Builders have a near record number of Homes Under Construction (Yellow Line).
More Inventory. More Price Reductions. Coming Fall/Winter 2022. pic.twitter.com/mqXjFWxNtY
— Nick Gerli (@nickgerli1) October 18, 2022
Mission Accomplished, Mr Powell?
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