Homebuilder Sentiment Soars Despite Mortgage Rate Woes

Homebuilder sentiment in the market for single-family homes rose one point in July to 56, marking the seventh consecutive month of gains and the highest level since June 2022. Builders attribute the increased demand to low supply in the resale market, but higher mortgage rates and supply-side challenges continue to impact the market. The rise in interest rates has strained affordability, leading to a drop in sales expectations for the next six months. Despite this, builders are using fewer incentives, and sales of newly built homes have seen a significant increase compared to last year.