Index: Homebuilder market sentiment falls to lowest point of year

Sept. 19 (UPI) -- Homebuilder sentiment over the housing market fell to its lowest point of the year in September as prices continue to adjust downward, according to the latest index released by the Home Builders/Wells Fargo Housing Market Index on Monday.

The National Association of Home Builders index said homebuilder sentiment tumbled three points to 46 on the index with anything under 50 being considered negative.

Homebuilder sentiment was as high as 83 at the start of 2022, but inflation and interest rate increases and a tumble in people taking out mortgage applications throughout the year have dampened the spirit of contractors.

The current streak of nine straight months of declining sentiment is the first time there has been this long of a slide since May of 2014.

"Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households," NAHB Chairman Jerry Konter, a Savannah, Ga. developer, said in a statement.

Konter added that 24% of builders reported reducing home prices, up from 19% last month, another indicator of a weakening market,

"The housing recession shows no signs of abating as builders continue to grapple with elevated construction costs and an aggressive monetary policy from the Federal Reserve that helped push mortgage rates above 6% last week, the highest level since 2008," said NAHB Chief Economist Robert Dietz in a statement.

"In this soft market, more than half of the builders in our survey reported using incentives to bolster sales, including mortgage rate buydowns, free amenities and price reductions."

The index is derived from a monthly survey the NAHB has been conducting for more than 35 years. It gauges builder perceptions of current single-family home sales and sales expectations for the next six months.