The National Association of Home Builders (NAHB) reported that Builder Confidence fell by -12 points in July, the biggest drop on record outside of the collapse in April 2020 during the COVID-19 lockdowns. The crucial Traffic of Prospective Buyers component also plummeted by the second-largest amount on record this month as affordability challenges weigh heavily on homebuying activity. In fact, the NAHB notes that 13% of builders had to reduce selling prices in order to drive sales and limit cancellations as demand has significantly waned. The collapse in these indicators confirms that the housing market is on very thin ice –and if the ice does soon break– there is almost no chance that the Federal Reserve will be able to execute an economic “soft-landing”…
Eli Petropoulos, CFA – Sr. Market Analyst
