WASHINGTON, DC — Rapidly rising interest rates combined with ongoing home price increases and higher construction costs “continue to take a toll” on builder confidence and housing affordability, according to the National Association of Home Builders.
The Washington, DC-based trade association said today that builder confidence in the market for newly built single-family homes declined for the fourth consecutive month in April, with sales traffic and current sales conditions falling to their lowest points since last summer. The recent sharp jump in mortgage rates coupled with persistent supply chain disruptions “continue to unsettle the housing market,” the NAHB added.
Mortgage interest rates have jumped more than 1.9 percentage points since the start of the year and currently stand at 5%, the highest level in more than a decade.
“The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices and escalating material costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market,” observed NAHB Chief Economist Robert Dietz.