U.S. Builder Confidence Rises Amid Falling Mortgage Rates
U.S. home builder confidence increased in September, marking a break from four consecutive months of decline, as mortgage rates fell. The NAHB/Wells Fargo Housing Market Index rose to 41, up from 39 in August, surpassing economists' expectations of 40. This shift indicates the first positive outlook for future home sales since May. Despite the rise, builder confidence remains low, largely due to ongoing construction costs and inflation. The Federal Reserve's anticipated rate cuts are expected to ease mortgage interest rates and reduce costs for land development and construction loans. Notably, the average 30-year fixed mortgage rate has dropped to 6.20%, down from nearly 8% last October. Builder sentiment about sales expectations for the next six months also improved, climbing four points to 53. The easing mortgage rates have allowed builders to reduce price cuts, with the share of those lowering prices falling for the first time since April, and the average price concession dropping below 6% for the first time since July 2022.
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