Homebuilder confidence fell in October to its lowest point since May 2020, just after the pandemic hit, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday. The outlook for builders of single-family homes is rapidly worsening: Soaring mortgage interest rates—a direct result of the Federal Reserve’s campaign of anti-inflation interest rate hikes—have priced buyers out and dragged down the entire residential real estate market. On top of that, inflation is hammering household budgets, and many economists see a recession on the horizon. That’s all terrible news for people in the business of building new single-family homes, and economists say it’s likely to get worse before it gets better. “While other parts of the economy have been slow to respond to the Fed’s aggressive hiking cycle, the housing market has cooled remarkably this year,” PNC Senior Economist Abbey Omodunbi said in a commentary. “With rising interest rates, elevated inflation and worsening housing affordability, the housing market slump will likely continue well into 2023.” Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Builder Confidence Down 10 Straight Months as Housing Market Continues to Weaken."
