Builder sentiment climbed five points to 37 in October; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
Regarding the three components of the homebuilder index, sales expectations rose nine points to 54; current sales conditions climbed four points to 38; and buyer traffic increased four points to 25.
Thirty-eight percent of builders reported cutting prices in October compared with 39% in September, 37% in August and 38% in July. The average price discount rose to 6% after remaining at 5% for several months. Sixty-five percent of builders were using sales incentives other than price cuts to improve sales in October, which is unchanged from September.
“While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging,” said NAHB Chairman Buddy Hughes. “The housing market has some areas with firm demand, including smaller builders shifting to remodeling and ongoing solid conditions for the luxury market. However, most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”
