Builder confidence plunges as rate shock, costs squeeze margins

Builder confidence in the market for newly built single-family homes fell three points to 29 in October, the lowest reading since June 2012, as rising mortgage rates, higher energy and material costs and worsening labor and lot conditions weigh on project pipelines. The latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), released today, shows sentiment firmly in negative territory. Any score below 50 indicates more builders see conditions as poor rather than good. “Mortgage rates have climbed well above 7% in recent weeks, and higher gas prices and inflation have further weakened buyer traffic across much of the country,” NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio, said in the announcement. “Though builders are also contending with higher costs for construction loans, building materials and diesel, the Trump administration’s efforts to advance regulatory reform are helping to ease some of the cost pressures they face. Nationwide, more than one-third of builders reported immigration enforcement activity in their market areas during the past month, causing construction delays and discouraging legal workers fro...