This past Wednesday, the Federal Reserve decided to leave its benchmark interest rate unchanged. Policy officials also said they expect to hike rates once more before the end of the year. The news also weighed on Wall Street, causing major averages to close lower on the week.
The sour sentiment is affecting specific sectors as well. With average 30-year fixed-rate mortgage rates remaining above 7%, home builder confidence fell in September to 45, following a six-point drop in August to 50.
Home builder confidence, measured by sentiment across the single-family housing market, fell for the first time in five months in September. It’s not just interest rates. Builders are also contending with a construction worker shortage, and a lack of buildable lots. Materials to build homes have also increased, and rising insurance costs are threatening the sector as well.
On the demand side of the equation, stubbornly high mortgage rates are also affecting consumers.
Buyers’ Silver Lining
While home builders are feeling pessimistic, there might be a silver lining for buyers.
In September, 32% of home builders said they reduced their prices, the largest share since last December, and up from 25% in August. Price reductions are coming in at 6% on average. Moreover, almost 6 in 10 home builders are providing sales incentives, from material upgrades, warranties, or covering closing costs.
In the market for a home? Check out SoFi’s mortgage options.
Terms and conditions apply. Before you apply for a SoFi Mortgage, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and loan amount. Minimum loan amount is $75,000. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 09/25/23.
SoFi Mortgages originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org). Equal Housing Lender. SoFi Bank, N.A. is currently NOT able to accept applications for refinance loans in NY.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.