After a runup all year to a high of 56 in July, the NAHB Housing Market Index dropped to 50 in August and now 45 in September. Fifty is the threshold of positivity for this indicator, so new construction finds itself once again in negative territory. Builders cite high interest rates and low consumer demand as the blow to the outlook.
Due to the low number of existing homes available for sale, new construction has risen to represent 31.4% of all homes available listings, which is almost 3x the norm. The decline in contractors’ market prognosis could lead to a slowdown in permitting and housing starts, and that lower number of homes being built would further shrink inventory and keep prices elevated.
