(NAHB) The homebuilder sentiment in the US dropped by 8 points to 69 in May, its lowest level since June 2020.
The builder sentiment decline happens for the fifth consecutive month, indicating the impacts of a higher mortgage rates environment and increasing costs of materials.
The index gauging the current sales conditions plunged by 8 points to 78. Sales expectations over the next six months were down by 10 points to 62. Buyer traffic dropped by 9 points to an index of 52.
NAHB Chairman Jerry Konter commented on the sentiment saying that housing is slowing due to growing challenges. The sentiments are echoed by NAHB chief economist Robert Dietz who said that building material prices are 19% higher from the prior year, while mortgage rates have risen to a 12-year high, challenging affordability.
Overall, builder sentiment fell by 7 points to 62 in the Midwest, while the West saw 6 points drop to 83. In the South, the sentiment shed 2 points to 80, while in the Northeast, sentiment was unchanged at 72.
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