Builder Confidence Falls to 40
Builder Confidence fell four points in October to 40 from a downwardly revised reading in September, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It was the third consecutive monthly decline in confidence. All three major HMI indices posted declines in October. The HMI index gauging current sales conditions fell four points to 46, sales expectations in the next six months dropped five points to 44 and traffic of prospective buyers dipped four points to 26. NAHB attributed much of the decline to mortgage rates rising over 7% and economic uncertainty. Any number over 50 indicates that more builders view the component as good than view it as poor.
Building Permits Fall 4.4%
Overall building permits fell 4.4% in September to 1.47 million annual units after rising to 1.54 million annual units in August. Single-family permits rose 1.8% to 965,000 annual units after rising to 949,000 annual units in August and were down 13.4% from September 2022. Multifamily permits fell 14.3% to an annualized pace of 508,000 units after rising to 594,000 units in August. Permits fell year to date in all regions.
Housing Starts Rise 7%
Housing starts rose 7% in September to a seasonally adjusted annual rate of 1.36 million units after falling to 1.28 million units in August. Single-family starts rose 3.2% to a seasonally adjusted annual rate of 963,000 units after falling to 941,000 units in August but were down 12.8% year to date. Just 674,000 new homes were actually under construction in September, down 15% from September 2022. Multifamily starts rose 17.6% to an annualized pace of 395,000 units after falling to 342,000 in August.
New Home Sales Rise 12.3%
New home sales rose 12.3% in September to a seasonally adjusted annual rate of 759,000 homes after falling to 675,000 homes in August. Sales were up 33.9% from September 2022. New home sales continue to benefit from a lack of inventory of existing homes, although sales are expected to slow as mortgage rates climb. New single-family home inventory fell 5.4% to 435,000 new homes, a 7.9 months’ supply at the current sales pace; a 6 months’ supply is considered balanced. Completed, ready to occupy inventory is up 39.6% from a year ago, however that inventory type remains just 17% of total new home inventory. The median new home sale price in September was $418,800, down 3.3% from August and down 12.3% from September 2022. Pricing is down both due to builder incentive use and a shift towards building slightly smaller homes. Regional sales year to date were up in all regions. Sales of new homes are tabulated when contracts are signed and are considered a more timely barometer of the housing market than purchases of previously-owned homes, which are calculated when a contract closes.
Existing Home Sales Fall 2.0%
Existing home sales fell 2.0% in September to a seasonally adjusted annual rate of 3.96 million homes after falling to 4.04 million homes in August, according to the National Association of Realtors. Sales were down 15.4% from September 2022. The median existing-home sales price rose 2.8% from September 2022 to $394,200, the first time in six months the median existing home prices have fallen below $400,000. Inventory rose 2.7% from August to 1.13 million existing homes, a 3.4 months’ supply at the current sales pace. The current supply of existing homes for sale is roughly half what it was in 2019 before the pandemic. Regional sales year to date were mixed.
Regional Housing Data
Mortgage Rates Rise to 7.9%
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