Homebuilder Confidence Plunges to 14-Year Low as Mortgage Rates Soar

Homebuilders are feeling the most pessimistic about the new-construction market in 14 years, as surging mortgage rates keep would-be buyers on the sidelines this fall.Builder confidence in new single-family home sales shed three points month over month, decreasing the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) to 29 on Wednesday, Any reading below 50 reflects the industry's pessimistic view of the market.This is the lowest HMI since June 2012. For context, builder sentiment has now remained below 40 for 18 consecutive months.NAHB Chairman Bill Owens attributes sharp pullback to soaring borrowing costs and broader economic headwinds."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," says Owens. "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." Last Thursday, Freddie Mac reported that the average rate on 30-year fixed home loans held steady week over week as 7.4%...