US Homebuilder Sentiment Slumps To Lowest Since 2023

Confidence among US homebuilders slumped in May to the lowest level since late 2023 as the NAHB sentiment index tumbled 6 points to 34 (well below the 40 expected)…

Source: Bloomberg

All three components that make up the index fell, with a measure of expected sales in the next six months sliding to an 18-month low. 

A gauge of present sales dropped to the lowest since late 2022, while traffic of prospective buyers was the weakest in 1 1/2 years.

“The spring home buying season has gotten off to a slow start as persistent elevated interest rates, policy uncertainty and building material cost factors hurt builder sentiment in May,” NAHB Chairman Buddy Hughes, a builder and developer from Lexington, North Carolina, said in a statement.

Of course, we all know who is to blame for this…

“Policy uncertainty stemming in large part from the stop-and-start tariff issues has hurt builder confidence but the initial trade arrangements with the United Kingdom and China are a welcome development,” said NAHB Chief Economist Robert Dietz. 

“Still, the overall actions on tariffs in recent weeks have had a negative impact on builders, as 78% reported difficulties pricing their homes recently due to uncertainty around material prices.”

Let’s not forget that new mortgage rates are still sky-high relative to ‘average’ existing mortgage rates and homebuilders can’t afford to subsidize that difference forever…

In May, 34% of builders reported cutting prices, the largest share since December 2023, NAHB said. The share of builders reporting using sales incentives was unchanged at 61%.

The only thing is, homeBUYER sentiment has been in the shitter for months because of high rates and lack of affordability…

Maybe, homeBUILDERS are finally waking up to reality as Upton Sinclair said: “It is difficult to get a man to understand something when his salary depends on his not understanding it.”