Single-family production is running at a weakened pace due elevated mortgage rates and high construction costs that have led to a major slowing of the housing market and exacerbated housing affordability.
In another sign that the slowdown in the housing market continues, builder sentiment fell for the ninth straight month in September as the combination of elevated interest rates, persistent building material supply chain disruptions and high home prices continue to take a toll on affordability.
This shift was first caused by the initial impact of [COVID-19] on housing demand, which favored lower density neighborhoods. The shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing,
Confidence in the market for new multifamily housing was mixed in the second quarter of 2022, according to results from the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB).
Rising mortgage rates, high inflation, low existing inventory and elevated home prices contributed to housing affordability falling to its lowest point since the Great Recession in the second quarter of 2022.
Builders saw sales decline significantly as buyers were priced out of the market on higher interest rates and ongoing home building and development costs, including building materials, according to NAHB.
Increased interest rates, building material supply chain bottlenecks and elevated construction costs continue to put a damper on the single-family housing market, according to NAHB.
Builder confidence plunged in July as high inflation and increased interest rates stalled the housing market by dramatically slowing sales and buyer traffic.
Some customers are showing a reluctance to go forward with projects due to the higher costs and delays associated with material shortages, as well as higher interest rates, according to NAHB.
