US homebuilder sentiment dips in December
Homebuilder sentiment in the US recorded its twelfth straight monthly decline at the end of 2022 on the back of higher mortgage interest rates and construction costs.
The National Association of Home Builders' confidence index slipped by two points from November to reach a reading of 31 in December.
That reading was also the lowest since the middle of 2012, aside from the spring of 2020 when the pandemic first hit.
"Our latest survey shows 62% of builders are using incentives to bolster sales, including providing mortgage rate buy-downs, paying points for buyers and offering price reductions," said NAHB chairman Jerry Konter.
"But with construction costs up more than 30% since inflation began to take off at the beginning of the year, there is little room for builders to cut prices. Only 35% of builders reduced homes prices in December, edging down from 36% in November. The average price reduction was 8%, up from 5% or 6% earlier in the year."
However, there was a sliver lining according to Konter, in that December's decline was the smallest for six months.
Mortgage rates had fallen from 7% over recent weeks to 6.3%, so that for the first time since April homebuilders had registered higher future sales expectations, NAHB chief economist, Robert Dietz chipped in.
Dietz forecast that weak housing conditions would persist until 2024, when the 1.5m nationwide deficit of available homes and lower mortgage rates would spur a recovery.