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The NAHB/Wells Fargo Housing Market Index fell for the second consecutive month to 43 in June, compared with expectations for 45 in May, as mortgage rates continued to hover in the 7% range and construction financing costs rose.
“Mortgage lending remains high “Rising interest rates are keeping many potential buyers on the sidelines,” said Carl Harris, president of NAHB, a custom homebuilder from Wichita, Kan. Homebuilders also face rising construction and development loan rates, a long-term workforce shortages and lack of buildable land.
“The best way to reduce housing inflation and bring overall inflation down to 2% is to increase the country’s housing supply. A more favorable interest rate environment for construction and development loans will help achieve this goal,” he added.
The June HMI survey also showed that 29% of builders lowered house prices to boost sales in June, the highest proportion since January 2024 (31%) and well above the 25% in May. However, the average price reduction in June remained stable at 6% for the 12th consecutive month.
