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The NAHB/Wells Fargo Housing Market Index dropped to 34, from 40 prior and trailing the 40 consensus, making it the fourth straight month of declines.
The index is now at its lowest level since December 2022.
“While builder sentiment was down again in November, recent macroeconomic data point to improving conditions for home construction in the coming months,” said NAHB Chief Economist Robert Dietz.
Specifically, he pointed to the 10-year Treasury rate moving back to 4.5% for the first time since late September, which should help bring mortgage rates close to or below 7.5%.
“Given the lack of existing home inventory, somewhat lower mortgage rates will price-in housing demand and likely set the stage for improved builder views of market conditions in December,” he said.
NAHB is forecasting about a 5% increase for single-family starts in 2024 as financial conditions ease with improving inflation data in the months ahead.
