Homebuilder sentiment fells for the fourth consecutive month

Key takeaways: 

• Builder confidence dropped for the fourth consecutive month in April.
• According to Mortgage News Daily, the average rate on the 30-year fixed mortgage stood at about 3.90% at the start of March and is now up to 5.15%.
• Elevated mortgage rates only worsen high prices for both new and present houses.

Nattily increasing mortgage rates are tolling the country’s home builders as expensive new construction becomes even less cheap. 

Builder trust in the market for new single-family houses dropped 2 points to 77 in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index. 

Any reading past 50 is assumed to have positive sentiment, but the reading marks the fourth consecutive month of falls for the index, which stood at 83 in April 2021.

Of the index’s three components, present sales conditions dropped 2 points to 85. Customer traffic descended 6 points to 60, and sales anticipations in the next six months rose 3 points to 73 following a 10-point decline in March.

“Despite existing low inventory, builders report sales traffic and present sales states have fallen to their lowest points since previous summer as a sharp jump in mortgage rates and continued supply chain troubles continue to unsettle the housing market,” stated NAHB Chairman Jerry Konter, a builder and developer from Savannah, Georgia.

According to Mortgage News Daily, the average rate on the 30-year fixed mortgage stood at about 3.90% at the start of March and is now up to 5.15%. That is the highest rate in almost a decade. The

 rate loosely follows the yield on the U.S. 10-year Treasury, which has been on the increase but is also being affected as the Federal Reserve pulls out of the mortgage-backed bond market.