Builder confidence in the housing market fell for the seventh consecutive month in June, and one economist says this fall is going to continue.
A new report from the National Association of Home Builders and the Wells Fargo Housing Market Index found that builder confidence fell 12 points in June. This is the report’s second-biggest single-month drop recorded.
Ian Shepherdson, founder and chief economist of British firm Pantheon Macroeconomics, recently told Forbes that the U.S. housing market is in a “meltdown” that will continue to impact sales.
Homebuilder confidence is currently at a two-year low. Shepherdson told Forbes that anyone who bought a home in recent months likely will be sitting on a loss.
NAHB chairman Jerry Konter said in a statement that the costs to build are exceeding the market value of these homes and halting construction.
Experts say supply issues must be addressed to make housing more affordable.
A recent jobs report clued experts in on housing affordability when it revealed a slowing increase in construction jobs. This was a sign that housing affordability would reach significant lows in the U.S., according to Newsweek.
The drop in builder confidence is second only to April 2020, when the pandemic was just beginning.
The Federal Reserve hopes to continue battling inflation with its fund rate hikes, to “get back to a place where supply and demand are back together,” according to Fed Chair Jerome Powell.
The Fed is planning another rate hike at the end of July.
Affordability issues have already locked out many buyers from the market, but experts say this offers an opportunity for buyer hopefuls to regroup, build up some savings, and keep paying down debt.
Mortgage marketing experts also have a solution for lenders that are lacking business in the current market: Focus on educating potential clients about what to do while they wait for a home that meets their budget.
This includes offering content on what to do before purchasing a home, pushing preapprovals to help future borrowers get started on the mortgage process, and sharing the latest news and updates.
Lenders also should focus on customers who could benefit from equity loans or refinancing while home values are high.
Experts say offering customers alternative loan products such as home equity loans or adjustable-rate mortgages can help them achieve their homeowner goals.
Education is key to positioning a mortgage business as an industry leader, experts say — and keeping borrowers coming back time and again.
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