A new survey reveals fading optimism among homebuilders, and a downward revision in sentiment from February suggests a more sustained perception of deterioration.
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The National Association of Home Builders/Wells Fargo builder sentiment index for March was 70, the group said Thursday, and a downward revision for February, from 72 to 71, means that sentiment among builders has declined for three consecutive months.
While any reading above 50 indicates more builders see sales conditions as good rather than poor, it's been more than two years since the index recorded three straight months of declines.
The index has remained above 60 since September 2016.
Builders' view of current sales conditions held steady, though the outlook for sales over the next six months fell two points, to 78. A measure of buyer traffic fell three points to 51.
Mortgage rates fell slightly this week after hitting their highest average in more than four years a week ago.
Those rising rates will put even more people out of the market as the traditional spring home buying season begins.
Mortgage buyer Freddie Mac said that the average rate on 30-year fixed-rate mortgages fell to 4.44 percent this week after climbing to 4.46 a week ago.
The consequences of rising home prices and mortgage rates have begun to play out in national sales numbers.
Sales of occupied homes fell 3.2 percent in January and 3.6 percent in December, and the number of sales contracts signed in January dropped 4.7 percent, according to the National Association of Realtors.
That has pushed those who can afford new homes in that direction. The U.S. reported last week that groundbreakings on new homes jumped 9.7 percent in January to the highest level since October 2016.