NEW YORK — U.S. homebuilder sentiment has fallen to its weakest level in about 14 years as high interest rates weigh on the housing market.
The National Association of Home Builders' housing market index fell three points from September to 29 in October, the group said on the 19th. That is the lowest reading since June 2012 and below the 31 expected by analysts polled by Dow Jones.
The index measures builders' sentiment toward the market for newly built single-family homes. A reading below 50 means more builders view conditions as poor than good. The index has stayed below 50 for more than two years.
The decline reflects weaker demand for home purchases as mortgage rates climbed above 7% amid a recent rise in U.S. Treasury yields. Higher raw material costs, driven by energy prices that have risen because of the war in the Middle East, also weighed on sentiment. A tougher immigration crackdown by the Trump administration ahead of the midterm elections has deepened a labor shortage in construction, adding to the pressure.
In the latest survey, 43% of builders said they had cut home prices because of weak demand, the highest share since 2020. The average price cut reached 6%. Some 65% of builders said they were offering sales incentives such as help lowering mortgage rates.