It appears homebuilders are really starting to wake up to what Fed Chair Powell has been preaching as NAHB sentiment tumbled to the lowest level since June 2012 excluding the onset of the Covid-19 lockdowns.
The headline index dropped 2 points to 31 (after being expected to rise to 34)... but still a very long way to fall to match the utter disdain Americans have for buying homes right now...
The headline sentiment index is down 12 straight months, which represents the longest losing streak on record.
“NAHB is expecting weaker housing conditions to persist in 2023,” Robert Dietz, NAHB chief economist, said in a statement.
“We forecast a recovery coming in 2024, given the existing nationwide housing deficit of 1.5 million units and future, lower mortgage rates anticipated with the Fed easing monetary policy in 2024.”
Under the hood, the group’s measure of present sales decreased, matching the lowest level since mid-2012, while a gauge of prospective buyer traffic remained weak. The outlook looks somewhat less bleak as sales expectations for the next six months rose for the first time since April. Nonetheless, the gauge remains extremely depressed.
The latest survey shows 62% of builders are using incentives like mortgage rate buy-downs and paying points for buyers to try to boost sales, but demand remains subdued.
What does this mean for home inventories going forward?
Nothing good... which mean higher prices, less affordability, and an even more pissed off Fed.