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Builder Confidence Falls to 45 Builder Confidence fell five points in September to 45 after falling five points to 50 in August, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It was the second consecutive monthly decline in confidence. All three major HMI indices posted declines in September. The index gauging current sales conditions fell six points to 51, sales expectations in the next six months dropped six points to 49 and the gauge measuring traffic of prospective buyers fell five points to 30. NAHB attributed much of the decline to mortgage rates rising over 7%. A special question in the September HMI survey revealed that 42% of new single-family home buyers were first-time buyers in 2023, a big jump from the 27% in a more normalized market in 2018. Any number over 50 indicates that more builders view the component as good than view it as poor. Building Permits Rise 6.9% Overall building permits rose 6.9% in August to 1.54 million annual units after inching up to 1.44 million units in July. Single-family permits rose 2.0% to 949,000 annual units after rising to 922,000 units in July and were up 7.2% from August 2022. Multifamily permits rose 15.8% to an annualized pace of 594,000 units after falling to 512,000 units in July. Permits fell year to date in all regions. Housing Starts Fall 11.3% Housing starts fell 11.3% in August to a seasonally adjusted annual rate of 1.28 million units after rising to 1.45 million units in July. Single-family starts fell 4.3% to a seasonally adjusted annual rate of 941,000 units but were up 2.4% from August 2022. Just 676,000 new homes were actually under construction in August, down 16.3% from August 2022. Multifamily starts fell 26.3% to an annualized pace of 342,000. NAHB said mortgage rates rising over 7% were behind the steep decline. Starts fell year over year in all regions. New Home Sales Fall 8.7% New home sales fell 8.7% in August to a seasonally adjusted annual rate of 675,000 homes after rising to an upwardly revised number in July. Sales were up 5.8% from August 2022, a big decline from the 31.5% year-over-year increase in July. New home sales continue to benefit from a lack of inventory of existing homes as homeowners stay put rather than buy a more expensive home that will come with a higher mortgage rate. New single-family home inventory rose 4.8% to 436,000 new homes, a 7.8 months’ supply at the current sales pace; a 6 months’ supply is considered balanced. The median price of a new home in August fell to $430,300, down 2% from August 2022. Builders are once again turning to incentives, with 32% of builders offering incentives in August, up from 25% in July and the highest level since 2022. Regional sales year to date were mixed. 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 0.7% Existing home sales fell 0.7% in August to a seasonally adjusted annual rate of 4.04 million homes after falling to 4.07 million homes in July, according to the National Association of Realtors. Sales were down 25.3% from August 2022. The median existing-home sales price rose 3.9% from August 2022 to $407,100, the fifth time the median existing home price has exceeded $400,000. Inventory fell 0.9% from July to 1.1 million homes, a 3.3 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 7.3% 
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