- Confidence fell in June among US home builders, left uneasy by a rise in mortgage rates.
- NAHB’s housing market index dropped to 15 from 16 in May after two months of increase that had nurtured hopes of a bottom to the housing crisis.
- Mortgage rates have climbed in the recent weeks, pushing by rising government bond yields.
- Investors are concerned about inflation because of increased spending in Washington which is meant to pull the economy of the recession.
- Freddie Mac data showed 30-year mortgage was 5.59% average last week. 0.73% higher than the previous 4.86% in the average four weeks.
"The housing market continues to bump along trying to find a bottom," – David Crowe (NAHB chief economist)
- New home sales have gone up 2x in the latest 3 months period.
- Affordability has gone up with the long, deep slide in prices, there was a 15% drop, YoY.
- Foreclosures though are still competing with the new-home market.
- Layoffs and tight credit have also slowed new-home sales.
- Inventories of unsold homes are high, ratio of homes for sale to houses sold in April exceeded 10 months.
- Home construction fell 13% in April compared to March.
- Index gauging prospective buyers though also stayed flat at 13.
- Index estimating traffic of prospective buyers also stayed flat at 13.
- Index gauging sales expectation slipped to 26 from 27.
"Builders are taking their cue from consumers, who remain uncertain about the economy and their own situation. Builders are also finding it difficult to complete a sale because customers cannot sell their existing homes." – David Crowe
Source: WSJ
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