As per the report, numerous builders are still lowering home prices in order to stimulate sales.
On October 17, the National Association of Home Builders (NAHB) published its report on the NAHB Housing Market Index for October. The report revealed a decrease in the index from 45 in September to 40 in October, falling short of the expected consensus of 44.
NAHB noted that lower levels of buyer traffic were reported by builders, particularly as younger buyers were unable to afford homes due to the impact of higher interest rates on the market. Additionally, the report highlighted that the increased interest rates have raised the cost of builder development and construction loans, leading to a reduction in supply.
In October, 32% of builders reported reducing home prices, with an average price discount of 6%. Given that mortgage rates have surpassed the 7.50% level according to Freddie Mac data, the market awaits the impact of home builders' price cuts on housing market activity.
In addition to the housing market data, traders reviewed the September Industrial Production report, which indicated a 0.3% month-over-month increase in industrial production.
Following the release of the housing market data, the U.S. Dollar Index retreated to around 106.20 as traders responded. Despite the rise in Treasury yields, traders bet that the Federal Reserve will not increase rates again this year.
Gold approached the $1930 level as traders observed the U.S. dollar's decline, while the heightened demand for safe-haven assets further supported gold.
After the NAHB Housing Market Index report was released, the S&P 500 moved away from its session lows and surpassed the 4360 mark. The discouraging report offered some backing to stocks as traders speculated on a less aggressive approach from the Fed.
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