The National Association of Home Builders (NAHB) Housing Market Index fell four points to 40 in October, keeping builder sentiment below the key breakeven level of 50. This marks the third straight monthly decline, with confidence at the lowest level since January. All three components of the index moved lower, with current sales conditions dipping four points to 46, future sales expectations down five points to 44, and buyer traffic falling four points to 26.   

What’s the bottom line? Rising mortgage rates was a key reason cited for declining confidence, as “builders have reported lower levels of buyer traffic” per NAHB Chair Alicia Huey. Higher rates have also impacted builder costs, further eroding sentiment. But there was a glimmer of good news for potential buyers – 32% of builders reported cutting prices, matching last month for the largest percentage since last December.