Builder sentiment decreased two points to 67 in June, falling to a two-year low amid higher mortgage rates and slower housing demand, according to cnbc.com. It reached a record high of 90 in November 2020.

Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had fallen to 30 in April 2020.

Of the homebuilder index’s three components, current sales conditions fell one point to 77; sales expectations in the next six months decreased two points to 61; and buyer traffic decreased five points to 48.

Mortgage News Daily reports the average rate on the 30-year fixed mortgage jumped to 6.28% as of June 14.

“Six consecutive monthly declines for the HMI is a clear sign of a slowing housing market in a high-inflation, slow-growth economic environment,” said NAHB Chairman Jerry Konter. “The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates.”

Material costs also continue to pose challenges for homebuilders.

“Residential construction material costs are up 19% year-over-year with cost increases for a variety of building inputs, except for lumber, which has experienced recent declines due to a housing slowdown,” said NAHB Chief Economist Robert Dietz.

Original Information Source:

https://www.nrca.net/RoofingNews/homebuilder-sentiment-falls-to-a-two-year-l