the high mortgage loan ratesHigher construction costs derived from global inflation and a slump in consumer demand due to lack of affordability have pulled down the confidence of construction companies in the states during 2022.
for the twelfth time in a row, the belief of Housing Developers Single-family homes posted monthly decline in December, falling two points to 31 housing market index (HMI) of the National Association home builders (NAHB).
According to the study, this is the lowest reading since mid-2012, excluding the start of the pandemic in the spring of 2020.
Developers encourage the market
To keep the market afloat in the face of inflation and rising mortgage rates, construction companies have sought to maintain housing supply Affordable for buyers.
The association’s survey found that 62% of builders use incentives to boost sales, including paying lower mortgage rates, user points and rebates.
Despite this, NAHB President Jerry Konter explained that construction costs had increased by more than 30% because of inflation already in the year, so there was little room for real price cuts.
“Only 35% of developers made less House prices In December. The average reduction was 8%, compared to 5 or 6% in early 2022,” the expert pointed out.
Finally, NAHB chief economist Robert Dietz noted that for the market housing construction The bottom has fallen in the United States because, even in this economic climate, the country has a shortage of 1.5 million units and lower mortgage rates are projected in 2024 with easy monetary policy from the Federal Reserve.
“Las mortgage rates They have fallen from more than 7% to about 6.3 percent in recent weeks. Also, for the first time since April, builders reported a rise in future sales expectations,” concluded the expert.