Homebuilder Sentiment Tumbles Back Below Pre-COVID Levels

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by Tyler Durden
Wednesday, Jun 15, 2022 - 02:08 PM

The headline NAHB sentiment index fell in June from 69 to 67 (as expected), with all three sub-indices tumbling back below pre-COVID levels. The group’s gauge of prospective buyer traffic fell five points to 48, the lowest since June 2020. The measure of present sales also declined to a two-year low, and sales expectations for the next six months dropped to the lowest since May 2020.

Source: Bloomberg

That is the sixth straight month of declines and the headline is now at the lowest in two years.

“The housing market faces both demand-side and supply-side challenges,” Robert Dietz, chief economist at the NAHB, said in a statement.

“Residential construction material costs are up 19% year-over-year with cost increases for a variety of building inputs.”

“On the demand-side of the market, the increase for mortgage rates for the first half of 2022 has priced out a significant number of prospective home buyers,” he said.

By region, builder sentiment declined in three of four regions. Sentiment improved in the Midwest.

Homebuilder sentiment has a long way to go to catch down to homebuyer sentiment...

Source: Bloomberg

But as Upton Sinclair is often cited as saying: "It is difficult to get a man to understand something when his salary depends on his not understanding it."